A year after the infamous Terra, FTX and Celsius crashes of 2022 and the many events that have shaken the industry since then, executives are bringing up the role crypto rating agencies play in mitigating risks in the crypto space.

In 2022, Ben Goertzel, CEO of decentralized artificial intelligence (AI) firm SingularityNET, argued that rating agencies rather than regulators could rebuild trust in crypto. Fast forward to 2024, the executive told Cointelegraph that he could not find any regulatory efforts that would give him confidence in protecting crypto users.

On the other hand, the executive added that “transparent, crowd-sourced and intelligently aggregated rating mechanisms can add a lot to the crypto landscape.” Goertzel also noted that advances in AI technology will now make it easier to produce customized summaries of the reputations of various assets in the crypto space using raw data and reports from a variety of sources.

Goertzel said he doesn't believe ratings agencies could have prevented the FTX crash, but that the manager could at least "alert customers to numerous observable red flags in advance."

Anastasia Ulianova, co-founder of crypto rating platform ARIA, agrees that the role of rating agencies in crashes like FTX is limited. Ulianova said they can raise "red flags" when a crypto's risk is higher than its performance, but they cannot predict crashes.

Despite this, the executive believes that beyond assessing the risks and legitimacy of projects, rating agencies can allow investors to evaluate the risk-reward ratio of tokens and determine whether the expected returns should justify the risks. The executive added that their company's goal as a rating agency is "to ensure that crypto assets gain a legitimate place in the traditional investment portfolio."