FTX Crisis Is a 'Gift to Bitcoin Haters': Kraken Founder Jesse Powell

Jesse Powell, the founder and former CEO of centralized exchange Kraken, has taken to Twitter to air his thoughts on the bombshell of FTX’s liquidity crisis this week. 

“I know we’re going to get past this,” Powell reassured his readers, “but this is a massive setback. I’m really trying to control my rage.” 

Powell then dove straight into a ten-tweet broadside that doesn’t explicitly namecheck FTX or its CEO Sam Bankman-Fried, although it’s clear from multiple references that he has the ailing exchange and its management firmly in his crosshairs. 

“An exchange implosion of this magnitude is a gift to Bitcoin haters all over the world,” he wrote. “It's the excuse they were waiting for to justify whatever attack they've been keeping in their back pocket.”

In the lengthy broadside, Powell implicitly called FTX and Sam Bankman-Fried “clowns” and “con artists” and blamed the exchange’s downturn on “recklessness, greed, self-interest, hubris, sociopathic behavior.” 

He also predicts the contagion will spread, as it did back when Terra’s collapse triggered a domino effect of bankruptcies that wiped out crypto investment firm Three Arrows Capital and lenders like Celsius, Voyager, and several others. 

However, FTX and Bankman-Fried weren’t Powell’s only targets. He blamed venture capital investment firms for throwing money at projects without performing due diligence. Powell rounded off his thread with a list of what he saw as red flags about FTX. 

FTX backers take massive hit 

It’s been a long week in crypto and it’s only Thursday. 

In the short period since the true extent of FTX’s financial troubles became known on Tuesday, when fellow exchange Binance proposed a bailout (then backed out), several crypto companies stepped forward to disavow any connection to the beleaguered FTX, including Coinbase, Circle, Tether and Maple Finance. 

Binance Backs Out of Deal to Buy FTX: 'Beyond Our Ability to Help'

One day after crypto exchange Binance announced its intent to acquire competitor FTX for an undisclosed amount, the company pulled out of the deal. “Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said in a statement, first reported by the Wall Street Journal and tweeted a few minutes later. When Binance CEO Changpeng Zhao announced the deal on Tuesday, he warned that it would be pending until the due di...

On the other hand, several companies have had to face the music. On Wednesday, crypto-focused financial services company Galaxy Digital announced it had a $76.8 million exposure to FTX.

American VC firm Sequoia capital today disclosed that it was writing off its $150 million exposure to the exchange. 

The world’s largest asset manager, BlackRock, is also a notable investor in FTX.