Billionaire bitcoin bull Mike Novogratz says crypto should and will be regulated and the FTX disaster has created a 'deficit of trust' in the whole industry

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Mike Novogratz speaks at the 2015 SALT conferenceReuters/Rick Wilking
According to Bitcoin bull Mike Novogratz, the FTX disaster has created a “trust deficit” in crypto.
The industry should and will be regulated, he said, pointing to the fallout from Sam Bankman-Fried's crypto exchange.
But while investors are rocked by this volatility, crypto is going nowhere, he told CNBC.
The FTX debacle created a “trust deficit” in the cryptocurrency market, according to Bitcoin Bull and Galaxy Digital CEO Mike Novogratz, who argued that the industry should and will be regulated by Sam Bankman-Fried after the exchange’s demise.
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“This is about transparency and disclosure in many ways. Our industry has failed to regulate itself. I think the money side of crypto, companies like ours that buy and sell and lend and make derivatives are and should be regulated," he said in an interview with CNBC on Wednesday.
Novogratz pointed to FTX's messy balance sheet, which had no in-house accounting department and has intertwined its finances with Alameda Research, the affiliated trading firm. Sources familiar with the companies have claimed that Alameda has traded customer funds from FTX, CNBC reported, and FTX's new CEO, who is leading the company through Chapter 11 bankruptcy proceedings, said employees may even have company funds to buy from Homes and personal items used Bahamas.
"I think coins should be segregated in your account and not lent unless you give them permission to lend," Novogratz said, noting that other exchanges like BlockFi had clearer terms about what customer funds would be used for.
"It's always about building trust with your customers. And right now we have a trust deficit. People think there's a black swan around every corner, that everyone else is a sociopath who says one thing and does another," Novogratz said.
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But while Novogratz described the situation as a "crisis of confidence" and warned that investors are not "over the hill" yet, he believes crypto will remain in the mainstream.
“There are 150 million people who have already decided to store part of their net worth in Bitcoin in this decentralized community verified by cryptography. And so bitcoin is not going away in any world, or frankly, the blockchain and ethereum and everything else,” he said.
Other major investors have also expressed renewed bullishness despite the shocking collapse of the Bankman Fried stock market. Ark Invest's Cathie Wood reiterated her prediction that Bitcoin would hit $1 million in the next decade as crises could eventually strengthen the industry and reveal the "survivors."
Read the original article on Business Insider
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