Speaking on CNBC’s “Closing Bell” on Thursday, Peter Smith called the collapse of crypto exchange FTX “a tragedy and a total failure of governance.”

The CEO and co-founder of cryptocurrency exchange Blockchain.com noted that there is a need for crypto investors to go back to the drawing board and hold their assets on their own. private keys.

Smith explained:

“Crypto is one of the few assets in the world that you can custody yourself, and I think we’ll see people increasingly return to that model, as well as a model of trust in regulated companies in the space.”

He added:

“The ultimate reality and the coolest part of crypto is that you can store your funds in your own private key where you have no exposure to the counterparty.”

The liquidity crisis facing FTX will also include various measures brought into the crypto ecosystem, the CEO of Blockchain.com noted.

For example, the trend towards regulated crypto institutions will be the norm, with more crypto investors emphasizing corporate structure.

Smith noted that FTX was significantly popular within groups based in Silicon Valley. As a result, it did not significantly emphasize the economics of cryptocurrencies. He noticed:

“This was very much a Silicon Valley push play, and we’ve clearly seen that it didn’t work.”

Some analysts believe that Coinbase will be among the main beneficiaries when the increased focus is on regulated crypto entities.

The proof-of-reserve concept is also making the rounds in the crypto space with the aim of bringing more transparency, reported Blockchain.News.

A proof of reservation uses a Merkle or Hash tree for data verification, synchronization, integrity, and transparency purposes. “What is Proof of Reserves? An audit by a third party that ensures a custodian owns the assets it claims. A snapshot of all held balances is taken and added to a Merkle tree, a privacy-friendly data structure that encapsulates the balances.” Gate.io crypto exchange explained.

Binance CEO Changpeng Zhao (CZ) pushed the proof-of-reserve trend because it would drive more transparency in crypto exchanges by flagging their digital asset holdings.

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