Zane Tackett suggests alternatives to "boomer procedures" when it comes to FTX bankruptcy.
Bitcoin (BTC) and cryptocurrency may “take years to recover” from the FTX scandal, one industry analyst warns.
In a Twitter thread on Nov. 11, Filbfilb, co-founder of trading suite Decentrader, said that the Terra LUNA debacle was itself still playing out.
Filbfilb: "I've never seen such a debacle"
The crypto industry is experiencing “a clear case of what goes up must come down,” Filbfilb summarizes.
As the fallout from FTX and Alameda Research only begins to become apparent, many industry businesses and associated tokens have been left reduced to a shadow of their former selves.
Amid bankruptcy concerns from those with exposure to FTX and investigations from regulators, the outlook looks bleak for the industry’s reputation.
For Filbfilb, FTX-Alameda is itself a product of the implosion of Terra, Three Arrows Capital and others earlier this year.
“1) Most of this all links back to the first 3 AC / Celius meltdown,” he began.
He highlighted two other key causes:
“2) Businesses in the space compounded their aspirations based on supernormal, parabolic industry growth. 3) Cash is king; cash flows of many entities are down to the tune of 80%.”
The situation is in fact all too familiar; overly eager businesses create an ecosystem on steroids, which grows too quickly and takes on too much risk.
“Price, users, cashflow and compounded, cross-collateralized businesses using rapidly declining assets as balance sheet assets with future obligations works when price go up - its suicide when the tide goes out,” Filbfilb continued.
As such, for the cycle not to repeat itself, it may take “many years” of restructuring.
“So yes, im annoyed about the whole thing, ive never seen such a debacle, i understand why we are where we are but it is inexcusable by some of the people involved and they need to be held to account,” he concluded.
FTX ex-sales head shuns bankruptcy "boomer procedures"
Feelings are tense for countless investors and businesses with funds tied up in now frozen FTX accounts.
Related: Hodlers in loss sit on 50% of BTC supply after $5.7K Bitcoin price dip
On Nov. 11, Zane Tackett, the exchange’s former head of international sales, confirmed rough liabilities totaled -$8.8 billion.
In a Twitter thread of his own, he quizzed users on whether FTX should create a "cool token" as a way of restructuring debt instead of filing for bankruptcy in the traditional manner, something he called “boomer procedures.”
“There's no way to paint a pretty image out of these numbers, but when I saw the balance sheet this evening i thought it was going to be much worse,” he revealed.
“Now, granted, there's a massive hole in liquid assets, there is a pretty big chunk of change in the ventures portfolio.”
Less than an hour after publication, the survey had accrued 3,100 responses, with 71% calling for token creation.
Such a move would be similar to that of fellow exchange Bitfinex, which in 2016 released its UNUS SED LEO token after it was hacked for $70 million in BTC.
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