The collapse of the FTX cryptocurrency exchange will be one of the darkest moments in crypto history. The company experienced severe cash flow issues in November and was unable to meet the withdrawal demands of its customers.
Binance, which is the largest crypto platform in the world, was initially ready to help, however after auditing, Binance finally decided not to proceed with the move. FTX was unable to find a solution and eventually filed for Chapter 11 bankruptcy and CEO Sam Bankman-Fried resigned.
This has shocked the cryptocurrency market. Prices of most cryptocurrencies fell sharply, with bitcoin falling below $16,000. Concerns about contagion still plague the market. In the following, several analysts have come forward to track the impact of the FTX collapse.
Liquid Global, the Japanese crypto platform owned by FTX stopped production shortly after its parent company filed for bankruptcy. The first fell victim to hackers last year and lost more than $90 million in cryptocurrency. At that time, FTX secured $120 million in debt financing so that Liquid Global could resume its services.
Crypto lending platform Genesis Global Capital also temporarily halted withdrawals, prompting a large number of clients to begin withdrawing their assets from the entity. “Abnormal demand” suggests that clients fear their investments could be affected if they remain in the hands of a centralized organization.
Venture firm Multicoin Capital was also affected. Managing partners Kyle Samani and Tushar Jain admitted that they kept "too many assets in FTX." The company expressed hope that it could regain some of its distribution but realized this could be a challenging task as many of them face bankruptcy.
Singapore's national holding company owned by local government Temasek invested $210 million in FTX International and $65 million in FTX US. It informed that investment has almost declined to zero due to the decline of the stock market.
Nevertheless, Singapore's Deputy Prime Minister, Lawrence Wong assured that the FTX crisis had "very little" impact on the local economy since most large financial institutions have not yet joined the crypto wave.
Europe's largest digital asset investment and trading group – CoinShares also revealed that over $30 million, or about 11% of its total net asset value, is stuck in FTX. irma Mike Novogratz's crypto financial service, Galaxy Digital also stated that the company has more than $76 million worth of exposure.
Not only that, the world's largest asset manager, BlackRock – is also on the list. CEO Larry Fink revealed his company invested $24 million in FTX before the collapse.
Day after day it can be seen that there are a series of reports reporting that the effects of the collapse of the FTX exchange are still having an impact on the crypto market.
