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The FTX Chapter 11 bankruptcy is a barrier to upcoming digital currencies in the crypto market. In the past two weeks, crypto users have been affected due to price fluctuations in the crypto market. Many questions still need to be resolved regarding FTX’s sudden downfall in the market. Many investors are afraid to invest in crypto assets after facing huge losses in the recent FTX collapse.
Recently, the Digital Currency Group (DCG) CEO Barry Silbert stated that the recent downfall of FTX hurt the company’s growth. After FTX’s collapse, DCG lost $175 million (USD). Barry Silbert stated that DCG joined a growing list of industry leaders trying to settle users’ assets after the downfall of the FTX market price.
On November 16, 2022, DCG subsidiary Genesis Global Capital stopped all bitcoin withdrawals and loan applications for their users. Genesis is a crypto trading and lending platform mainly focusing on institutional clients and high-net-worth individuals. As per the reports on November 17, 2022, DCG received a document stating that Genesis was undergoing an “ongoing run on deposits.” On November 21, DCG received a $1 billion (USD) emergency loan.
Coinbase, Crypto.com, and Binance assured their customers during the FTX downfall.
On November 8, Coinbase CEO Brian Armstrong assured their platform users that Coinbase is a regulated institution and that the entity holds users’ funds as one-to-one, making a situation like FTX impossible.
“Coinbase is a publicly traded company in the United States, and we have built our business in a way that allows us to be transparent about our track record, balance sheet strength and effectively and prudently manage risk for our customers and ourselves,” Brain stated.
On November 14, Kris Marszalek, CEO of Crypto.com, went live on Youtube to clarify the users who have been facing issues since last week. He assured users that the platform maintains a strong balance sheet and that the FTX on the platform is limited to $10 million (USD).
“We will prove them all wrong with our actions. We will continue operating as we have always operated. We will continue being the safe and secure place where anyone can access cryptocurrency,” the CEO of Crypto.com stated.
Last week, Crypto.com mishandled nearly $400 (USD) million in transactions, raising further concerns among site users. Before the reserve announcement, the entity withdrew $210 million (USD) worth of USDT from Binance and $50 million (USD) worth of USDC from Circle.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
