Venture capitalists battling with the difficulties of proper crypto firm due diligence should be looking at getting back to the basics — to “trust the chain,” a crypto-focused venture fund executive argues.
Speaking to Cointelegraph, John Lo, head of digital assets at Recharge Capital — a $6 billion fund with crypto and decentralized finance (DeFi) projects on its portfolio — said that FTX shook the “confidence in this industry.”
“There will be a lot of soul-searching,” he said. According to Lo, due diligence has always been a problem in the venture space, even outside of crypto.
He said the action plan taken by crypto venture capitalists in response to the FTX collapse will be a crucial deciding factor for either an effective recovery or a deepening of the industry crisis.
However, Lo argues that the crypto industry provides the world with a step toward a solution, a public and immutable ledger, arguing:
“Crypto VCs specifically need to go back to crypto principles – trust the chain. We’re going to see a lot more businesses operate on-chain, and VCs rely on on-chain data to…