In the aftermath of the 2022 collapses of Terra, FTX, and Celsius, crypto industry executives are underscoring the critical role of rating agencies in safeguarding investors. SingularityNET CEO Ben Goertzel, a vocal advocate for AI solutions, highlights how advances in AI could facilitate comprehensive summaries of the reputation of crypto entities.
Advances in AI for Enhanced Risk Assessment
Goertzel remains skeptical about the effectiveness of regulatory efforts, expressing that global regulatory agencies have yet to inspire confidence in protecting crypto users. He suggests that transparent, crowdsourced, and intelligently aggregated rating mechanisms, powered by AI, could significantly improve the crypto landscape.
Mitigating Risks: Rating Agencies and the FTX Case
Despite the FTX collapse, Goertzel believes that rating agencies might not have averted the incident but could have provided early warnings by flagging potential red flags. ARIA Co-founder Anastasia Ulianova agrees, emphasizing that rating agencies can signal elevated risk but cannot predict collapses.
Evaluating Tokens for Investors
Ulianova argues that rating agencies play a crucial role beyond risk assessment by helping investors determine the risk-to-reward ratio of tokens. The goal is to enable investors to make informed decisions based on whether expected returns justify associated risks. ARIA’s rating agency mission is to legitimize crypto asset integration into traditional investment portfolios.
As the crypto industry grapples with ongoing challenges, industry leaders like Goertzel and Ulianova believe that AI-driven rating agencies could become instrumental in building trust and providing valuable insights for investors navigating the intricate crypto landscape.