BlackRock CEO: FTX Token caused downfall, but tech still revolutionary
The CEO of the worlds largest asset management firm, BlackRock, believes that the reason why FTX failed is because it created its own FTX Token (FTT), which was centralized and therefore at odds with the “whole foundation of what crypto is.”
Larry Fink, who serves as chairman and CEO of the $8 billion investment company — made the remarks during New York Times’ 2022 Dealbook Summit held on Nov. 30, and added that despite his belief that FTX's own-created token caused its downfall, he believes that crypto and the blockchain technology which underpins it will be revolutionary.
Centralized exchange tokens, such as Binance Coin (BNB) and fellow exchange Crypto.com’s Cronos (CRO), account for over $57 billion of the $862 billion total crypto market cap. Fink suggested that he was still skeptical of these tokens and believes “most of these companies [controlling the tokens] are not going to be around.”
Later in the interview with New York Times’ journalist Andrew Sorkin, Fink said that while he sees Exchange Traded Funds (ETFs) as being the cause for the previous evolution of investing, he believes that tokenization will be behind the next, noting:
He then elaborated on some of the potential benefits of tokenization, suggesting that it would change the investing ecosystem, as rather than trusting banks, “instantaneous settlement” would be possible on distributed ledgers that show every owner and seller of securities.
“Think about instantaneous settlement [of] bonds and stocks, no middlemen, we’re going to bring down fees even more dramatically," he explained.
Related: Sam Bankman-Fried confronted over the fall of FTX in live interview
Fink admitted that BlackRock had a $24 million investment in FTX, but refused to speculate on
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