Wall Street veteran and blockchain pioneer Caitlin Long delivered a presentation during Virtual Blockchain Week urging the crypto sector to be wary of the big number of IOUs underpinning stablecoins and third-party custodied assets.

Cointelegraph spoke to Long to talk over her recommendations and concerns for the industry, why crypto users must retain control over their individual keys, and why she believes Bitcoin (BTC) is a safety-oasis nugget despite the violent March crash.

Greater disclosure is needed to bolster confidence in crypto

Long said, "In the crypto sector there is really very little disclosure near how much indebtedness the various exchanges and custodians have provided," urging the crypto community "non to recreate the same affair that happened in the traditional financial industry."

Long emphasized that crypto users are unable to tell if the manufacture's service providers are solvent, stating, "We don't know that they've taken on debt, merely nosotros don't know that they have it because nobody is disclosing anything."

Long urges cryptocurrency exchanges and firms to publish proofs of reserves, stating that "the final time we really saw some of the exchanges really doing proofs of reserves [was] in 2022."

Alternatively, Long advocated for greater use of auditing firms, adding, "That'due south the easiest fashion for the industry to prove that it actually does deserve our business organisation and our trust."

Too many IOUs underpin the crypto sector

Caitlin asserted that at that place is a concerning amount of 'IOUs' underpinning cardinal segments of the crypto ecosystem.

She noted that, while analysts estimate that about 25% OF Bitcoin and Ether (ETH) are held in third-party custody and 75% are cocky-custodied, the entire stablecoin sector is built on the ground of IOUs, stating:

"Really, this industry is not as cocky-custodied as you lot might recall when you pull dorsum the hood. And that's why information technology actually is important equally an industry to step up and commencement disclosing whether the exchanges and custodians are actually solvent."

Long besides urged crypto users to retain command over their individual keys stating:

"If you ain your crypto avails outright, you should control your keys [...] I believe Bitcoin is a safe-haven asset precisely considering it's nobody's IOU."

"Bitcoin is a safe-haven asset"

Long stated that her conventionalities in Bitcoin as a safe-haven nugget was not shaken past its vehement March crash among the global liquidity crisis, stating, "What we saw is it behaved exactly as golden behaved in 2008."

"Initially, it corrected by a lot because, in an surroundings where everybody is just indiscriminately selling everything, Bitcoin trades 24/7 and is easy to sell — it's a liquid market."

"Just because it didn't acquit as a safety haven asset on the worst twenty-four hour period of trading does not mean that it'due south non a rubber oasis asset," she stated, calculation, "I wasn't discouraged past that at all considering I'd seen information technology earlier."