“What we’re hearing … is that the majority of funds on this platform have come from institutional investors,” Ian Taylor, the chief executive of industry group Crypto UK, told the Treasury select committee on Monday. “Now there are a lot of UK regulated crypto exchanges that take retail money and hopefully at the moment it’s OK. We haven’t seen anything. But… this is an extremely fluid situation.” Even as Taylor was speaking at the parliamentary hearing, Travis Kling, head of crypto hedge fund Ikigai, announced that his fund had become one of the first serious casualties of the FTX failure and was now in dire straits. “We had a large majority of the total hedge fund assets in FTX,” Kling said. “When we went to retire on Monday [morning], we barely got out. Now we are stuck next to everyone else. “There’s a lot of uncertainty about what’s going to happen next… At some point, we’ll be able to make a better call on whether Ikigai will continue or just go into takedown mode.” “It’s hard for me to imagine space bouncing back quickly from this ordeal,” Kling added. “Too many were burned too badly. It is now clear that the space has not done enough to identify and prosecute bad actors. We let too many sociopaths become too powerful and then we all pay the price.” However, at the Treasury committee hearing, the crypto industry dismissed suggestions that much had to change as a result of FTX’s failure. “I think it would be very wrong to tar the whole industry with this bad apple, which happened to be a very big apple,” said Tim Grant, head of Europe, Middle East and Africa at crypto investment firm Galaxy Digital. “We’ve lost $77 million at this point, which we don’t feel good about. “But mostly the users were institutional, and also equity investors were among the most sophisticated and largest investors in the world. So there were a lot of very experienced eyes on this, and what that tells us is that this was a bad actor who was doing things behind very closed doors that we had no view of as a wider group. “This is the same with Bernie Madoff and other similar cases, and they were in regulated industries.” Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. The stock market crash was precipitated by tweets from Changpeng Zhao, the head of Binance, the world’s largest crypto exchange. But Daniel Trinder, his vice president of government affairs, insisted the goal was not to take down a competitor. Zhao had tweeted that he was selling some tokens that act as shares in FTX, but Trinder said the motivation was purely “due to the realization that it wasn’t worth their value”. While that announcement started a process that ultimately brought down a competitor, “that was certainly not the intent behind the sale trigger.” Trinder also pledged to provide the committee with internal documents detailing talks between Binance and FTX in the run-up to the former’s aborted bailout bid.
