The co-founder of Bitmain believes that regulation is needed to restore confidence in the cryptocurrency market.
John Ge, chief executive officer at Matrixport, revealed that he believes regulation is needed to restore confidence in the cryptocurrency market.
Matrizport is a Singapore-based digital asset manager with over $10 billion in assets under management and custody. Ge was previously the head of investment and financing as well as a founding partner at Bitmain.
During an interview with Tech Crunch, Ge said the ongoing market crash was inevitable, considering the way some companies operated. He said;
“The core issue is that we saw players whose business model is like a black box. They borrow money from investors without giving transparency over how the money will be used.”
The cryptocurrency market saw a few companies declare bankruptcy as they failed to meet customer expectations. Celsius, Three Arrow Capital, and a few other companies have faced financial troubles in recent months, and many had to declare bankruptcy.
Ge explained that a major problem in the crypto space is that some companies are acting as players and referees at the same time. He said;
“Many of them are providing both asset management and proprietary trading. An asset manager should not be doing proprietary trading, and if it does, it needs to follow stringent leverage requirements. Even the most conservative investment strategy has risks and may result in losses, but the principle is to be transparent with your customers, not fraudulent, deceptive, or misleading.”
When asked about how retail investors can regain confidence in the cryptocurrency market, Ge suggested that regulation is needed to achieve that. He pointed out that the pace of regulations tends to fall behind that of industry development.
He added that investors had lost a certain level of confidence in the crypto market, and it will take time for the industry to recover.
The cryptocurrency market has lost nearly $2 trillion since reaching an all-time high in November 2021. At press time, the total market cap stands around $1.1 trillion.
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