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Blackrock CEO says, firm invested $24 million in FTX

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Blackrock CEO says, firm invested $24 million in FTX

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Larry Fink, BlackRock Chairman and CEO said that the firm invested $24 million in the now-bankrupt cryptocurrency exchange FTX through the funds it manages. He added that despite the fact that FTX collapsed, the technology behind crypto is still relevant in the future.

Fink opined that FTX failed because it created its own centralized FTX token (FTT). The structure of this token was in contradiction to the decentralized nature of cryptocurrency.

The Blackrock CEO was speaking at the New York Times’ 2022 Dealbook Summit on 30 November when he made these remarks. He said that despite believing that FTX’s token is itself responsible for its collapse, the technology underlying cryptocurrency and blockchain is revolutionary.

No future for centralized tokens

According to Fink, most of the exchanges issuing centralized tokens are not going to be around.

Fink stated, “I believe the next generation for markets, the next generation for securities, will be tokenization of securities.” This development is going to alter the nature of the investing ecosystem as transactions would take place on trustless distributed ledgers rather than banks.

“Think about instantaneous settlement [of] bonds and stocks, no middlemen, we’re going to bring down fees even more dramatically,” Fink added.

Blackrock’s relationship with crypto

The world’s largest asset manager, Blackrock, has made major crypto investments this year.

On 27 September, Blackrock launched an exchange-traded fund (ETF) for its European customers. The blockchain that powers it is known as the iShares Blockchain Technology UCITS ETF.

According to BlackRock, 75% of its holdings are in blockchain companies such as miners and exchanges, with the remaining 25% in companies that support the blockchain ecosystem.

On 3 November, Circle announced that it was going to invest some of its funds in Circle Reserve Fund which was created in partnership with BlackRock. Circle is the issuer behind USD Coin (USDC).

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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