Star Xu: Why This Crypto Cycle Will Change Your Life

Star Xu says FTX’s rapid growth, political engagement, bankruptcy, and customer losses helped prompt regulators to assert jurisdiction over crypto companies serving their residents, even when those companies block local IP addresses. He points to MiCA, which spans 30 European countries and attracted regional headquarters from firms including OKX, Coinbase, and Kraken, as an example of regulation shaping where companies operate.

Xu sees blockchain moving beyond crypto trading into financial infrastructure: he cites Bitcoin ETFs on Nasdaq and the New York Stock Exchange, Ethereum smart contracts, and tokenized equity and national debt. He argues that blockchain and stablecoins could also enable global, around-the-clock clearing where exchanges and banks limit commodity-market hours.

Xu argues that younger users’ preference for global, instant, low-cost, round-the-clock financial services supports demand for systems that avoid the time and paperwork of opening a traditional bank account. He expects stablecoins, tokenized assets, and exchange services to become day-to-day infrastructure for millions or even billions of people.

Xu identifies customer-fund protection as essential to a crypto company’s survival, citing the technical demands of multilayer custody and operating a trading engine continuously without mistakes. He points to Mt. Gox’s loss of 800,000 customer bitcoin and its 2014 bankruptcy as an example of the severe exchange and custody risks seen in past crypto cycles.

Xu argues that regulation, transparency, and larger auditors can reduce risk for crypto users, while acknowledging that oversight cannot eliminate failures. He also says blockchain-linked regulatory systems could let authorities monitor activity in real time, and argues that European users face materially lower risk with MiCA- or MiFID-regulated firms than with offshore exchanges.