‘There will be many more zeros’ — Kevin O’Leary on FTX-like collapses to come

Unregulated crypto exchanges will continue to fall like dominoes post-FTX, with plenty more “disasters” to come, alerts Shark Tank star and financier Kevin O’Leary.

The previous representative and supporter for the now-bankrupt FTX exchange informed Kitco anchor David Lin in a Jan. 17 interview that FTX was simply one in a long line of “unregulated exchanges” likely to fail:

“If you’re asking me if there’s going to be another meltdown to zero? Absolutely. One hundred percent it’ll happen, and it’ll keep occurring over, and over and over once again.”

Unregulated exchanges are those that aren’t subject to routine auditing, aren’t registered and controlled by a securities commission, and don’t run under guidelines similar to standard stock exchanges and brokerages.

“Well, all of these exchanges, all the unregulated exchanges are having huge outflows today. Smart money has got the joke. They saw what occurred at FTX and they’re not sitting around for an explanation,” he said.

The Shark Tank star then made a stark warning to so-called “unregulated” crypto exchanges.

“If you’re not willing to be investigated, […] you don’t have an audit, you don’t want to be transparent, you do not wish to reveal ownership, why should institutional capital remain? Obviously, it’s not going to.”

The collapse of FTX in November prompted strong calls from the community for higher openness from crypto exchanges. Within weeks, five central exchanges finished their proof-of-reserve audits, while plenty more revealed plans to do the very same.

However, some observers, including a senior authorities from the United States Securities and Exchange Commission, cautioned that proof-of-reserves don’t paint a true picture of a company’s monetary position and asked financiers to be “very careful” of the claims being made.

Some of the auditors, such as Mazars, have relatively back-flipped on their assistance for crypto companies. In December, the business removed its audit for crypto exchange Binance and apparently stopped doing proof-of-reserve audits for crypto companies entirely.

Other auditing companies such as FTX’s auditor Armanino have likewise apparently stopped dealing with crypto exchanges like OKX and Gate.io. O’Leary commented:

“Frankly, you know, it’s extremely hard to discover an auditor that wishes to touch this stuff right now because of the uncontrolled cowboy environment. It’s all going to end and yes, there’ll be much more nos.”

Earlier this month, O’Leary’s fellow Shark Tank host Mark Cuban informed The Street that crypto wash trading on central exchanges will be the cause of the next crypto “implosion.”

As much as 70% of the volume on uncontrolled exchanges is wash trading, according to a December report by the National Bureau of Economic Research.Related: Binance’

put FTX out of business’– Kevin O’Leary Despite the noise, O’Leary

states he’s doubling down on his crypto investments, particularly in Bitcoin(BTC ).”I have actually been returning into crypto markets lately. Whenever Bitcoin drops listed below$17,000 I add to our positions there.””Crypto is getting very interesting because we’re lastly beginning to see the bearer of guideline entering play and I think

long-term that’s a good idea,”he included.