The collapse of FTX marked the first in a long string of collapses of unregulated crypto exchanges. Investor and Shark Tank star Kevin O’Leary said this in an interview with Kitco’s David Lin.
“If you ask me whether there will be another crash, the answer is unequivocally yes. It will happen 100%, and it will happen again and again,” O’Leary said.
According to him, all unregulated exchanges are currently facing massive client outflows.
“They’ve seen what happened with FTX, and they won’t wait for explanations,” the investor added.
Turning to trading platforms, O’Leary noted that their reluctance to be transparent and disclose collateral prompts institutional investors to pull capital. The refusal of some audit firms to work with crypto companies is also indicative, he said.
“To be honest, it’s very hard to find an auditor who would touch this topic, because it’s an unregulated Wild West environment. This will all end, and yes, there will be many more bankruptcies,” the investor concluded.
Nevertheless, O’Leary confirmed that he continues to invest in digital assets:
“Every time Bitcoin dips below $17,000, I add to my position. … Crypto becomes interesting because we are finally seeing a regulator enter the game, and I think, in the long run, that’s a good thing.”
After the collapse of FTX in November 2022, several bitcoin exchanges decided to disclose their reserves. The first to come to that conclusion was Binance CEO Changpeng Zhao, with similar moves made at OKX, Gate.io and Huobi.
In early December, Mazars published an audit report on Binance, which experts criticised. Later it paused operations with all crypto-industry clients, with Armanino taking a similar step.
Back in November, O’Leary admitted that he symapthises with Sam Bankman-Fried. He called him a brilliant trader and expressed a willingness to support him if a new project launches.
The Shark Tank star also said that he does not consider the founder of FTX guilty until his alleged fraud is proven. The investor named Binance as involved in the collapse of the crypto exchange.
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