Bitcoin maximalist Max Keiser criticizes DeFi after ThorSwap suspends operations due to FTX hacker, highlighting concerns about DeFi’s vulnerability.
In a recent turn of events, prominent Bitcoin maximalist Max Keiser has voiced his concerns about the decentralized finance (DeFi) sector following the suspension of operations by ThorSwap. The DeFi platform decided to halt its activities in response to an attempt by the FTX hacker to convert stolen Ethereum (ETH) through its platform.
The FTX exchange fell victim to a hacker last November, resulting in the theft of millions of dollars worth of cryptocurrencies. The thief then managed to convert a substantial portion of the stolen assets, totaling approximately 180,000 ETH. ThorSwap, which had been operating smoothly, promptly suspended its services to thwart the hacker’s efforts to launder the stolen funds through its platform. As of now, the hacker still retains control over approximately 110,000 ETH.
Max Keiser’s Critique: DeFi Vulnerabilities and Reputation Concerns
Max Keiser, a well-known advocate for Bitcoin, seized the opportunity to criticize the DeFi sector, highlighting the vulnerability of such platforms to illegal activities. He argued that the ability to shut down a DeFi platform to prevent illicit operations tarnishes the reputation of the entire decentralized finance industry.
The situation raises a fundamental question for the DeFi sector: should platforms prioritize maintaining formal decentralization at the risk of allowing hackers to convert stolen funds, or should they suspend operations temporarily to prevent bad actors from profiting?
Max Keiser’s Controversial Stance on Cryptocurrencies and SEC Support
Max Keiser, who has consistently espoused the view that all cryptocurrencies except Bitcoin are fraudulent and should be banned, has been a vocal supporter of the U.S. Securities and Exchange Commission’s (SEC) crackdown on various cryptocurrency exchanges. He echoes SEC Chairman Gary Gensler’s stance that most cryptocurrencies, excluding Bitcoin, should be classified as unregistered securities.
Furthermore, Max Keiser has taken the SEC’s side in the high-profile legal battle between Ripple Labs and the SEC, which has been ongoing since late December 2020. In a recent development, Ripple secured a significant victory when the court ruled that its XRP sales on the secondary market do not qualify as securities.
As the DeFi sector grapples with security and regulatory challenges, Max Keiser’s criticisms serve as a reminder of the ongoing debate surrounding the role and future of decentralized finance in the broader cryptocurrency ecosystem. The incident involving ThorSwap and the FTX hacker raises important questions about the balance between decentralization and security in the crypto space.