The Role Of Crypto Rating Agency In Overcoming Risks In The Crypto World

Crypto needs

JAKARTA - More than a year after Terra, FTX, and Celsius's famous fall in 2022, along with many other incidents that have plagued the industry since, executives have discussed the role of crypto rating agencies in reducing risks in the crypto world.

In 2022, Ben Goertzel, CEO of the decentralized artificial intelligence company (AI) SingularityNET, argues that rating agencies can rebuild confidence in crypto much better than regulators. Looking forward to 2024, the executive said he still has not found any regulatory efforts that could increase his confidence in protecting crypto users.

"Nothing the world regulatory agency has done since 2022 has increased my confidence that they will be able to, in practice, benefit more than harm to customers or service providers in the crypto space," Goertzel said.

On the other hand, the executive added that "transparent, crowd-based, and intelligently integrated rating mechanisms can add a lot to the crypto landscape." Goertzel also mentioned that advances in AI technology now make it easier to produce a special summary of the reputation of various entities in crypto using raw data and reports from various sources.

According to Goertzel, the handling of US regulators on FTX cases shows that there is no need for a special law for crypto fraud because existing laws can be used to capture "crypto fraud," as does anyone else who facilitates fraud.

While Goertzel doesn't believe that a rating agency could prevent the FTX's fall, the executive believes that it could at least "warn customers of the many red signs that could have been observed before."

Anastasia Ulianova, co-founder of the crypto rating platform Aria, agrees that there are limits to the role of agency rating in a fall like FTX. Ulianova said that while they can "lift the red flag" when the risk of a cryptocurrency is higher than their supposed performance, they cannot predict a fall.

"The very important point to emphasize is that the rating can only tell how big the risk you are taking. This is not at all a definite prediction of the upcoming fall," Ulianova said.

Meskipun demikian, eksekutif tersebut mempercayakan bahwa di luar menilai risiko dan legitimasi proyek, agensi rating dapat memungkinkan investor memilih rasio risiko-untung dari token untuk membantu mereka menentukan apakah imbal hasil yang diharapkan risiko. Executive tersebut menambahkan bahwa tujuan perusahaannya sebagai agensi rating adalah untuk "meminimasi tempat aset kripto dalam portofolio investasi tradisional."