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Kraken CEO Jesse Powell Issues Tough Critique of 'Reckless' DeFi Launches
"Stop f**king up your bulls**t DeFi scams and expecting exchanges to bail you out," Powell said.
Jesse Powell, chief executive of the U.S.-based cryptocurrency exchange Kraken, has lashed out at the decentralized finance (DeFi) sector in the aftermath of Monday's $24 million arbitrage exploit of Harvest Finance.
STORY CONTINUES BELOW
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In a tweet on Tuesday, Powell said he would "not accept" DeFi projects' attempts at "externalizing the cost" of "hasty reckless" rollouts.
"Stop f**king up your bulls**t DeFi scams and expecting exchanges to bail you out," Powell said. "Invest in audits, insurance and please [do your own research]."
Stop fucking up your bullshit DeFi scams and expecting exchanges to bail you out. I will not accept your attempt at externalizing the cost of your hasty, reckless rollout. Invest in audits, insurance and please DYOR. Taking your losses is the only way to enlightenment.
— Jesse Powell (@jespow) October 26, 2020
The comments come after several DeFi projects suffered some form of an exploit or major management failure, while some have opened to investors with faulty or negligible audits of their code.
At the end of September, gaming protocol Eminence Finance suffered an exploit that saw $15 million worth of DAI drained while still in testing.
The same month, DeFi project SushiSwap suffered a major blow when its pseudonymous creator "Chef Nomi" made off with the development fund, prompting a 73% crash in its SUSHI token. Chef Nomi did eventually hand back the $14 million worth of ether (ETH) and apologized to affected investors.
Still, the incident highlighted the danger of placing trust, and money, in projects run by unknown individuals.
See also: So Now They’re Hacking DeFi Protocols Before They’ve Even Launched?
Also in September, DeFi lending protocol bZx fell victim to its third exploit of the year after a flaw in its code allowed someone to make off with $8 million in crypto.
Despite all this, the DeFi sector is still drawing investors seeking yield, reaching a new milestone of $12.45 billion in total value locked up in smart contracts on Oct. 25.
That figure dropped by about $1.15 billion after Monday's exploit of Harvest, and now stands at $11.3 billion, according to DeFi Pulse.
It's not clear why Powell suggested exchanges are having to "bail out" DeFi failures. CoinDesk reached out to clarify but did not receive a reply by press time.
Sebastian Sinclair
Sebastian Sinclair is the market and news reporter for CoinDesk operating in the South East Asia timezone. He has experience trading in the cryptocurrency markets, providing technical analysis and covering news developments affecting the movements on bitcoin and the industry as a whole. He currently holds no cryptocurrencies.
