StarkWare CEO: Crypto Crash Will Weed Out Weak Projects

The crypto market crash is forcing startups to close at a rate Ben-Sasson has not seen in a decade. The StarkWare CEO and Zcash co-founder said the downturn will strengthen the industry by eliminating projects that lack the funding to survive.

Ben-Sasson has worked in crypto since 2013. He told EconoTimes that earlier bear markets let struggling companies limp along for months or years. This time is different. A growing number of blockchain startups are running out of cash, leading to record closures and bankruptcies.

StarkWare itself cut its budget several months ago. Ben-Sasson said even teams with strong products and capable engineers are shutting down because they cannot raise more money.

The shakeout is only part of a broader shift, he said. Major banks and investment funds will keep reducing their crypto exposure at least until after the next U.S. midterm elections. If Democrats win control of Congress, institutional caution could deepen.

Ben-Sasson views that retreat as a positive for the long term. Cryptocurrencies were never meant to be an extension of the traditional banking system, he said. The industry's core mission is financial freedom and decentralization. Those principles clash with the highly regulated nature of conventional finance.

The current crypto winter is painful for companies and investors. Ben-Sasson believes the correction will let sustainable projects and real innovation emerge stronger when the cycle turns.