Kevin O’Leary Predicts Multiple Crypto Meltdowns
- Kevin O’Leary stated that there are plenty more such “meltdowns” to come and all unregulated exchanges will collapse like FTX.
- “It’s very hard to find an auditor that wants to touch this stuff right now because of the unregulated cowboy environment,” he said.
- The popular investor stated that if crypto exchanges are not transparent and don’t undergo audits, institutions won’t work with them.
- “Any time Bitcoin drops below $17,000 I add to our positions there,” O’Leary confirmed.
The crypto market is gradually healing from the collapse of multiple crypto firms in 2022, and the last thing that the industry needs is another implosion. Interestingly, Shark Tank star and renowned investor Kevin O’Leary recently commented on the latest collapse of crypto exchange platform FTX, stating that there are plenty more such “meltdowns” to come.
During an interview with Kitco anchor David Lin, the investor said that the unregulated crypto exchanges would continue to fall like the once-leading exchange FTX. O’Leary, who is known for its support to now-bankrupt FTX, said that the meltdown was just one in a long line of “unregulated exchanges” likely to collapse. He stated:
“If you’re asking me if there’s going to be another meltdown to zero? Absolutely. 100% it’ll happen, and it’ll keep happening over, and over and over again.”
Notably, unregulated exchanges are ones that don’t follow similar operational procedures to conventional stock exchanges and brokerages, aren’t registered with and governed by a securities commission, and aren’t subject to routine auditing. O’Leary stated that the so-called “unregulated” exchanges are currently facing massive outflows.
“They saw what happened at FTX and they’re not sitting around for an explanation,” he added.
The Shark Tank star went on to issue a stern warning to such cryptocurrency exchanges and said, “If you’re not willing to be audited, […] you don’t have an audit, you don’t want to be transparent, you don’t want to disclose ownership, why should institutional capital stay? Of course, it’s not going to.”
The FTX crash, which left cryptocurrency investors in a state of massive shock, sparked loud concerns from the community for increased transparency from crypto exchanges. Five centralized exchanges, including Binance, the biggest cryptocurrency exchange in the world, finished their proof-of-reserve audits in a matter of weeks, and several others announced plans to follow suit.
Nevertheless, a senior official from the United States Securities and Exchange Commission (SEC) cautioned that proof of reserves doesn’t accurately represent a company’s financial position and urged investors to be “very wary” of these companies’ claims.
While crypto investors are dubious about the true financial standing of these companies, a number of auditors, including Mazars, which had audited Binance, have also seemed to change their minds. The firm reportedly stopped doing proof-of-reserve audits for cryptocurrency companies in December and even removed its audit for Binance.
Other auditing companies, including FTX’s auditor Armanino, have also cut their ties with cryptocurrency exchanges, including OKX and Gate.io. O’Leary commented on the matter by stating:
“Frankly, you know, it’s very hard to find an auditor that wants to touch this stuff right now because of the unregulated cowboy environment. It’s all going to end and yes, there’ll be many more zeros.”
It is crucial to note that a December report by the National Bureau of Economic Research (NBER) reveals that over 70% of the volume on unregulated exchange platforms is wash trading.
Despite the ongoing chaos, O’Leary continues to increase his crypto investments.
“I have been going back into crypto markets lately. Any time Bitcoin drops below $17,000 I add to our positions there. Crypto is getting very interesting because we’re finally starting to see the bearer of regulation coming into play and I think long-term that’s a good thing,” O’Leary said.
It is crucial to note that Kevin O’Leary had a major stake in the now-bankrupt crypto exchange FTX, and he even went on to become the face of the firm. As recently reported by Bitnation, the multi-millionaire wanted to help Sam Bankman-Fried prevent the collapse of his exchange.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
