“The problem with the current state of crypto custody is that the custodians do not need to commit fraud for all of your assets to be wiped out due to the failure of the custodian. Crypto can’t materially advance as a business tool or an asset class until custody is fixed,” Ackman tweeted.
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Crypto custodians safeguard the private key which is proof of ownership for the funds held in crypto wallets. Interestingly, Ackman’s tweet was cited by a Twitter user who said, “Generate your own private key and solve all of your custodian problems in 12-24 words. Tweets like this only come from those who painfully miss the point.”
The billionaire investor, in turn, cited the tweet and highlighted the fact that institutions cannot be self-custody without regulatory issues.
“Institutions cannot self-custody without severe regulatory issues. Most individuals would prefer not to self custody. Crypto will remain a sport for hobbyists unless this is fixed,” Ackman tweeted.
Ackman also clarified on Sunday that his tweet regarding Sam Bankman-Fried was wrongfully interpreted by many people. “I was in attendance at the @andrewrsorkin interview of @SBF_FTX and tweeted that I found SBF believable. Many have interpreted my tweet to mean that I am defending SBF or somehow supporting him. Nothing could be further from the truth,” he said.
Photo by Center for Jewish History, NYC via Wikimedia Commons