Failed FTX_Official and binance deal could erode trust in the crypto sector from both retail and institutional investors. By Aoyon_A
Unless another buyer is waiting in the wings, Binance’s exit from the acquisition likely seals the fate for FTX, and with that, trust in the crypto industry will further decline from both retail and institutional investors.
“A lot of normal users will lose their money, so this will be catastrophic for the ecosystem in the short-term,” said Jay Jog, co-founder of Layer 1 blockchain Sei Network. “There will be degraded confidence in crypto in the short term, both from an institutional standpoint and from a retail standpoint,” he added.
That sentiment was echoed by SmartBlocks Founder Mark Fidelman, who told CoinDesk, “If the deal between FTX and Binance doesn't happen, we'll need to see another major player step in like Coinbase to bail them out. Otherwise, trust will further erode in the crypto market and we'll all suffer for at least 6 months to a year.”
“This also sets back our industry as far as growth and trust across other industries that are looking to support and get involved with crypto and it will also affect other players in the crypto space that have assets tied and connected to FTX,” said Dan Edlebeck, head of ecosystem at Sei Network.However, it may not be a total exodus for institutional investors as they already have a large presence into the sector.
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