© Riot Blockchain, Inc./TNS/TNS Riot Blockchain 's Rockdale facility is undergoing a major expansion as it opens in July.One of the most prominent crypto leaders in North Texas says that the collapse of the FTX crypto platform is a wake-up call for crypto leaders to act more professionally.
Chad Harris, CCO of Riot Blockchain, which is building North America's largest bitcoin mining facility in Corsicana, gave advice to crypto entrepreneurs at the Texas Blockchain Summit in Austin last week.
"If I say this, it might hurt your feelings," he told the crowd. "I see the future. And some people in this segment and the industry as a whole may not be in it."
His comments came after FTX, the world's second-largest cryptocurrency exchange, filed for bankruptcy earlier this month, raising further questions about the legitimacy and long-term viability of the cryptocurrency industry.
"Bad behavior, mismanagement, poor financial planning, all the things that lead to bankruptcy ... every time that happens, it makes life difficult for all of us," he said. "And that keeps people from trusting us."
In his speech, Harris noted that this year's summit was sparsely attended for the first time since the November 2021 cryptocurrency crash. The price of bitcoin has fallen 73 percent over the past year to $15,786.
He said that two years ago this hall was full. “It's an audience full of passionate people who believe they can deliver what they're saying today to the public. I think that's important because every time one of us fails, it affects everyone in this room."
Tips for Crypto Leaders
Bad players, poor money management and a difficult business environment will continue to kill crypto industry players like FTX, Harris said. Harris again criticized FTX, which owes more than $3 billion to its 50 creditors, saying the company was too smart to go into debt.
"What others haven't done is that we remain very, very reliable on the road," he said. "We did not take any loans. We do not hire contractors. We have built a team of passionate people who believe in the core values of our business.
Harris is responsible for hiring more than 500 employees for Riot's success. This year, FTX founder and CEO Sam Bankman-Fried, who resigned Nov. 11, decided to keep about 300 employees and declined to hire more team members the same day FTX filed for bankruptcy.
Tax incentives and sales incentives allowed Riot Blockchain to hire a great team, Harris said. Rockdale, which owns the 700-megawatt power plant, says it's collecting more sales tax than ever before.
Crypto executives should stop exaggerating the power of their organization, Harris said. "If we don't really start making realistic promises that we can back up and keep, we're going to be very worried about elected officials," he said.
Organizations should work to involve the local community in their projects, including enlisting the support of at least one local elected official.
Harris cited the Corsicana group instead of building a new facility, admitting that doesn't always work for him. The 265-acre site, located about an hour south of Dallas, is expected to be operational in July and has an initial capacity of 400 megawatts. Opposition parties say the facility takes away resources from the community of 5,300 people.
"You've heard me joke about the Chad Harris Hate Club," Harris said. This is the real thing.
But as his company continues to pay back the community and hire local workers, the pressure from the "haters" is easing, Harris said.
Finally, Harris advised employers to do their homework and consider funding to create incentives, such as training programs, for Texas workers.
Leaders must grow
The loss of undisputed leader FTX is a clear sign that the cryptocurrency industry needs to change, and it needs to change fast.
"If you look at the industry today, it's collapsing at an unimaginable rate," he said. “Bitcoin was worth over $60,000 and everyone was driving Lamborghinis, flying airplanes and sitting on yachts. And let me tell you something, it's a whole different world."
Harris, the industry needs to get down to basics. He said cryptocurrency companies pay rent and wages like all legitimate businesses and should operate accordingly.
"Bear hats and jerseys, those days are gone," he said. “We have to have sweatpants and jackets. We have to wear dresses. This is a professional business. That's billions of dollars. We are creating opportunities for future generations."
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