Insights from Paris Blockchain Week

The first day of Paris Blockchain Week (PBW) was nothing short of a rollercoaster for crypto enthusiasts and traditional bankers alike. Amid the ambiance of innovation and uncertainty, industry leaders came together to dissect the shake-ups not just in the crypto world but across the banking landscape, framing their discussions against the backdrop of unexpected collapses.

A Panel of Experts Weighs In

One of the standout events was the panel discussion titled “FTX, Luna, Celsius, 3AC: From Hero to Zero”. This lively roundtable featured a mix of high-profile figures from firms like Node Capital and Six Digital Exchange. As they gathered on PBW’s illustrious Mona Lisa stage, the tension was palpable—if the art could talk, it would probably sound a lot like crypto enthusiasts grumbling through clenched teeth.

Diving into the Causes of Collapse

Zahreddine Touag, co-founder of Woorton, delivered a strong statement about the flaws in the crypto sector. He argued that the demise of major players like FTX wasn’t simply a case of bad luck but a cavalcade of poor investor diligence and insufficient risk management. He remarked,

“It’s a classic case of people thinking they’re safe just because they’re regulated.”

Oh, the irony!

He elaborated, illustrating that while individuals believed due diligence was taken care of with regulations, the reality was strikingly different. This notion that regulation equals safety is akin to believing that a traffic light guarantees you won’t get hit by a speeding car—it just doesn’t work that way.

The Fragile Banking System

Turning the spotlight on traditional banking, Touag highlighted the cracks in the system, particularly with the fractional reserve banking model. In rather dire terms, he put forth the idea that banks are operating on a model where they only keep about 12% of their funds liquid. He mused,

“The trillions they say they have on their books…well, they’re not just lying around.”

It’s like that friend who claims to have tons of money yet always asks to borrow a few bucks!

Signature Bank: A Case Study

Discussing Signature Bank, Touag drew a clearer line, stating that while Signature was an issue, it was not a shutdown story. The regulators took action, but there was no insolvency—and that made a significant difference. His conviction in Signature as a safe haven in the crypto banking landscape was palpable, proclaiming:

“In the crypto banking system, the best place to bank is Signature. Their regulators claim they will make every single depositor whole.”

So, it seems like there’s a glimmer of hope amidst the chaos, and for those navigating the treacherous waters of crypto finance, it may just be the life raft they need.