“I don’t think politicians or the average person are ever going to accept crypto as a real asset until it’s regulated by governments,” declared Armando Pantoja, International Speaker on Bitcoin, blockchain and finance technology. 

Pantoja, who’s based in Tampa, Florida, has been invested in crypto for over 10 years, and even developed his own cryptocurrency, HireMatch, in 2016.  He’s currently involved with several crypto projects and education.

Armando Pantoja

Pantoja says there needs to be some regulation within the cryptocurrency market to weed out bad actors and reassure investors.

Speaking on Taking Stock with Kalilah Reynolds, he said that the crash of the world’s second-largest cryptocurrency exchange, FTX, is another indication that rules must be put in place to govern the industry. 

He explained that FTX was one of the largest cryptocurrency exchanges in the world, behind Binance. 

Last week, FTX filed for bankruptcy after the company entered a liquidity crisis. 

“Sometime last week, Binance supposedly lost confidence in FTX. They put out a tweet saying it’s selling all the FTX tokens they have. That caused a run on the market,” Pantoja explained.

“It put fear into the market with people saying, ‘Well if Binance is selling, what do they know?’. It caused the users to withdraw their tokens at the same time, which caused a liquidity crisis because at the time, FTX didn’t have the money to give to all the people,” he added.

Binance later offered to acquire FTX and solve the liquidity problem. But after doing the due diligence checks, Binance decided against the purchase, causing even more panic within the market, and ultimately resulting in FTX’s bankruptcy filing. 

While it is unclear what information initially caused Binance to lose confidence in FTX, Pantoja noted that the company and its former CEO, Sam Bankman-Fried, were involved in some unethical business practices.

Pantoja, who has given presentations on cryptocurrency at TEDx and other conferences, said regulating crypto now will improve the generally negative view of the industry.

“We’re very very early in the life of cryptocurrency. It took about 100 years for stocks to be regulated and safe. For the first 100 years stocks were crazy, people were printing fake stock certificates,” he explained. 

He added that the early widespread fraud in the stock market in the US led to the “Great Crash” of Wall Street in 1929.

“This is what happens in maturing markets; there’s going to be manipulation, there’s going to be fraud. We’re in the wild wild west period, there are no rules and no regulations and everyone is trying to find their way,” Pantoja said. 

“There are so many things causing people to lose confidence in crypto, I believe regulation at this point would help crypto go from where it is right now to a real asset for people,” he added.

Pantoja clarified that he does not believe heavy regulations, such as those that govern traditional financial institutions, are necessary. 

“Just a framework of laws of what we can and can not do, just to make people safer. I don’t think a lot of people will ever have trust in cryptocurrency unless they have some type of assurance that they won’t get scammed,” he said.

He also urged cryptocurrency investors to store their crypto on secondary storage instead of on exchanges like FTX. 

“It’s very dangerous in this environment to keep your crypto on exchanges because we don’t know what will happen with any exchange,” he said.

He explained that individuals can transfer their cryptocurrencies to cold storage devices, similar to USB devices. This enables users to have complete access to their funds without fear of an exchange crashing.

Pantoja emphasised that cryptocurrency is still in its infancy and growing pains are to be expected, however, having a set of rules to guide the market can help to further its growth. 

WATCH THE EPISODE HERE