Shark Tank star and the owner of the NBA team Dallas Mavericks, Mark Cuban, says recent blowups in the crypto space, including the FTX implosion, “have been banking blowups,” not crypto blowups. He also explained why he invests in crypto.
Recent Blowups Aren’t Crypto Specific
Mark Cuban explained on Twitter Saturday that the implosion of FTX is not a crypto blowup. Commenting on his Shark Tank co-star Kevin O’Leary discussing why the collapse of the crypto exchange signals a turning point in the industry, Cuban tweeted:
These blowups have not been crypto blowups, they have been banking blowups.
“Lending to the wrong entity, misvaluations of collateral, arrogant arbitrages, followed by depositor runs,” the Shark Tank star elaborated. “See long-term capital, savings & loan and sub-prime blowups. All different versions of the same story.”
Many people on Twitter agreed with Cuban. One user described: “There was nothing specific about crypto … Other recent blowups (3AC, Celsius, Voyager, Blockfi) were all essentially tradfi-style blowups too (too much leverage, bad collateral, poor hedging of liabilities from client deposits, fraud).”
Aventus Ventures CEO Kevin Hobbs wrote: “This is true. It’s the centralized so-called crypto companies that are heavily invested in by bankers, run by ex-bankers, ex-SEC, CFTC, government that has caused all the largest blowups in crypto.” He added that true decentralized finance (defi) “with new regulation for Today’s world is what’s needed.”
The host of the Thinking Crypto podcast, Tony Edward, concurred with Cuban, stating:
Mark is right here. This was not a crypto failure but a scammer taking advantage of investors and the lack of regulation. Bitcoin, Ethereum, XRP, ADA blockchains etc are all in tack. It will take time and a major brand institution adopting crypto for us to build trust again with the mainstream.
Why Mark Cuban Invests in Crypto
In another tweet, Cuban shared why he invests in crypto despite recent market sell-offs following the FTX failure. The Dallas Mavericks owner tweeted Sunday:
A basic question. Why have I invested in crypto? Because I believe smart contracts will have a significant impact in creating valuable applications.
“I have said from day one, the value of a token is derived from the applications that run on its platform and the utility they create,” he clarified.