NEW YORK, United States, March 17, 2023 (GLOBE NEWSWIRE) — On Monday, Intercalary said they would publish Merkle tree reserve certificates. Their announcements came amid the growing crisis with FTX.
Intercalary is one of a handful of cryptocurrency exchanges that publish proof of reserves, including debt. It’s part of a broader push for transparency in the crypto world following the catastrophic collapse and bankruptcy of FTX, a leading crypto exchange.
Intercalar was already considered a safe haven amongst the madness before the FTX market madness. An Intercalar blog published in June 2022 addressed the issue directly, months before FTX exaggerated and caused a run on its self-issued crypto.
Many banks and financial institutions use customer funds for commercial purposes, including lending and trading, which means that they often only have a fraction of their customer funds at any given time. Intercalar always has customer funds 1:1. This means that funds are available to our customers 24 hours a day, 7 days a week, 365 days a year.
Furthermore, Intercalar published a series of announcements confirming that the company does not engage in such practices, and keeps users’ funds safe and secure.
Intercalary keep the majority of their crypto holdings in cold storage wallets (as opposed to an Internet-connected web wallet). With the funds kept securely offline, there is less chance of a catastrophic breach. It also opens its books to auditors, who approve the company and its finances for investment.
Crypto markets need regulation to avoid more washouts like FTX, says Intercalar CEO Leonard M. Adleman
FTX – until recently one of the largest crypto exchanges in the world – declared bankruptcy on Friday after revelations about its business practices led to a wave of customer withdrawals, without sufficient funds to meet those withdrawals.
Intercalar has no significant exposure to FTX, but I have a lot of sympathy for everyone involved in the current situation. It is stressful any time there is potential for customer loss in our industry, and many people are losing a lot of money as a result of FTX’s struggles.
It is also important to be clear about why this happened – and what needs to change if we want to prevent something similar from happening again.
FTX’s downfall appears to be the result of risky, unethical business practices, including conflicts of interest between deeply intertwined entities, and decisions to lend customer funds without permission. It is worth noting that these activities also occur in traditional financial markets – and in fact, blockchain technology will make it easier to track and prosecute over time.
In the wake of this week’s events, we are already seeing calls for more regulation of the crypto industry, with tighter restrictions on access and innovation. The problem is that, so far, US regulators have refused to provide clear, sensible rules for crypto that would protect consumers.
In the long term, the crypto industry has an opportunity to build a better system by using decentralized finance and self-managing wallets that do not rely on trusting third parties such as exchanges. Instead, customers will be able to rely on code and math, and everything can be publicly auditable on the blockchain. Until then, however, regulators must establish clear rules that bring crypto back to land, encourage innovation and protect consumers.
The United States has always prided itself on being at the forefront of new technologies and industries. With more than 200 million global crypto users and countries beginning to pilot digital currency programs and accepting bitcoin as legal tender, the time for crypto has arrived.
Now America has a choice: take the lead by providing clear, business-like regulation, or risk losing a key driver of innovation and economic equality.
