YEREVAN (CoinChapter.com) – The US Securities and Exchange Commission’s consecutive lawsuits against crypto exchanges Binance and Coinbase put the crypto market at risk of paring its near-50% rally year-to-date. However, Dawn Fitzpatrick, the CEO of Soros Fund Management, asserted that the recent tumult provides an opportunity for traditional finance to “take the lead.”
Soros Fund suggests a TradFi takeover
During the Bloomberg Investment Summit, Fitzpatrick assessed the significance of blockchain technology and added that “crypto is here to stay.” “What’s happened is clearly a setback. But right now, I actually think it’s a huge opportunity for the incumbent financial firms to actually take the lead,” commented the official.
While the CEO noted the irony behind suggesting a TradFi takeover of crypto, the lack of trust towards platforms like Binance was one of the reasons. She also alluded to the fact that average consumers and traders would likely benefit from such a shift as traditional institutions “segregate client assets” properly.
To clarify, mismanagement of client funds was one of the SEC’s accusations against Binance and its CEO, Changpeng Zhao. SEC alleged that Sigma Chain and Merit Peak, two foreign entities controlled by Zhao, served as “conduits for billions of dollars of customer money, ” improperly commingled with Binance’s funds.
Fast forward to Soros Fund statements, Fitzpatrick also cited the incompetence of some officials in the crypto scene.
said the CEO.
Especially the headlines of the last couple days, it’s clear these crypto native platforms would have benefitted from having an adult in the room. There are just long-held and simple norms about how you treat customer assets
The Fund has dabbed in crypto before
Notably, in mid-February, Soros Fund added to positions in crypto-related companies, such as crypto miner Marathon Digital (MARA), MicroStrategy (MSTR), and Silvergate Bank, according to an SEC filing.
In detail, Soros Fund Management purchased 39.6 million worth of Marathon convertible debentures. Convertible debentures are types of long-term debt issued by a company that can be converted into stock after a specified period of time.
Also, the Fund owns “call” options and “put” options on 50,000 shares of MicroStrategy stock, worth roughly $14.5 million. In addition to those common stock bets, the fund continued to hold nearly $200 million in MicroStrategy preferred shares.
Also read: Are Bitcoin and Tether Biggest Beneficiaries of Binance-SEC FUD?
Meanwhile, Soros shorted Silvergate before the bank’s collapse in early March. The Fund held put options on 100,000 shares of Silvergate, with a market value of $1.74 million, as of Dec. 31, according to a regulatory filing. The trade would turn a profit should shares drop beneath a certain level that wasn’t disclosed in the filing, and no expiration date for the options was given.
It is not yet clear whether Fitzpatrick plans a move on the crypto market herself. However, the Soros Fund could consider the market downturn as a good entry point.
