Cryptocurrency

Too big to fail? What the FTX collapse means for crypto exchanges



The crypto industry has been rocked by the collapse of FTX. Big-name investors from Sequoia Capital to SoftBank dumped hundreds of millions of dollars into the company, making bets that are now worthless.

Countless individual traders were hit by huge losses, too. Regulators are investigating claims that customer funds were misappropriated by FTX and its trading affiliate Alameda Research.

It marks one of the most serious problems for crypto to date, with questions rising about the health of other industry giants such as Binance and Crypto.com.

Contagion from the debacle is already playing out, with crypto lender BlockFi now seeking bankruptcy protection after revealing lending exposure to FTX and Alameda.

“I don’t think all the dominoes have fallen out from the contagion,” says Marieke Flament, CEO of the Near Foundation, which took investment from FTX. “The impact that this will have is that a lot of projects actually are not going to have the funds, and therefore the resources, for them to continue and develop.”

Investors are yanking their coins from exchanges to avoid getting caught in the fallout. Total bitcoin balances on exchanges fell from a peak of 3.1 million in 2020 to around 2.2 million at the end of 2022.

“Nothing’s too big to fail,” says Ian Rogers, chief experience officer of crypto security firm Ledger.

Is it time to abandon crypto exchanges, or is there still a place for centralized firms in an industry that prides itself on decentralization? Watch the video to find out.

#CNBC #CNBCExplains #SBF #FTX #CryptoExchange #SamBankmanFried #Binance

—–

Subscribe: http://cnb.cx/2wuoARM

CNBC International TV: https://cnb.cx/2NGytpz

Facebook:
https://www.facebook.com/cnbcinternational

Instagram:
https://www.instagram.com/cnbcinternational/

Twitter:

Related Posts

30 Comments

  4. Laura Jacobs

    I'm so excited 😊, I started earning $ 34,970 profit every 14days lately.. Success so far on my trades , I have not witness any loose since I started trading.

  8. Akın Yıldız

    Marshmello Finance MARSH3 prevents Bear market, bot trades, paper hands by its automatic algorithms, so it's the safest altcoin ever. I am sure it will hit 10 bucks in no time.

  14. Mustafa Bayram

    Marshmello Finance MARSH3 prevents Bear market, bot trades, paper hands by its automatic algorithms, so it's the safest altcoin ever. I am sure it will hit 10 bucks in no time.

  22. Apex Yao

    I mined some ETH with my GPU while I’m not using my PC. And when my friends ask me, what can it be used for, idk how to answer that 🤣🤣🤣

  27. Gary Butler

    in my opinion our time had reached its zenith, and it is now over. Everything not just FTX, Stock including 401Ks, are suffering from the recession and crashes. My $750K retirement equity portfolio is losing money. Because of inflation, I keep losing. Similar to how Rome fell under its despotic emperors, this world will also. I apologize if you are considering retirement but are concerned that your pension won't cover the rising expense of living. There are terrible foreign policies worldwide, as well as disastrous regulatory, fiscal, and energy policies.

  28. rick m60

    No. People willingly bought a lie. FTX had low fees and offered high interest. It was not sustainable. Everyone always talking smack about CB and others charging higher fees. Yeah! Because you want to be the customer, not the product

  29. Rylain Crestin

    Thanks for the recap on how FTX collapsed and I'm shocked to see that even more companies are dragged down along with the recent crash. I'm gonna wait for SBF on the hearing as I stake PGEN and get into Polygen's tier levels for future raises on their flexible launchpad.

Write A Comment

Share via