Humans Are the Cause of FTX's Downfall – Vitalik Buterin


 Immediately after FTX suffered a surprising fall, Vitalik Buterin, the co-founder of Ethereum (ETH) has expressed his opinion regarding the issue that resulted in the crypto market facing unexpected events.

Explained in more detail, Buterin stated that the fall of FTX was caused by humans rather than technology that many individuals cite.

The string, the basic stability of the distributed ledger* and the economic generation technology of digital assets are not the cause, but the issue is able to teach various lessons to the crypto ecosystem.

*Using independent computers (referred to as nodes) to record, share and expedite transactions in their respective electronic ledgers

This follows because he is of the view that the FTX crisis is likely due to its own founder where investors cannot know if the company is transparently offering its services or making a profit for itself.

Therefore, Buterin stated that one of the methods is "safe CEX" together with proof of insolvency which is able to provide security to investors from experiencing a large amount of losses.

He added that, apart from relying on fiat methods such as government licenses, auditors and corporate governance, exchange companies should create cryptographic evidence in order to prove that the funds held in the chain are sufficient to cover their needs.

In the meantime, the FTX crisis is reported to be caused by the exchanger itself using customer deposits for other purposes and resulting in them not being able to meet withdrawal requests with their current liquidity.