Crypto investors are worried about another major blowup
Crypto drama is in the air. Events unfolding over the past weeks have investors worried about another big crypto blowup. This time, it involves one of the world’s largest crypto exchanges, FTX.
A little history: FTX’s founder, Sam Bankman-Fried (SBF), also founded Alameda Research — a leading crypto trading firm.
- A CoinDesk report last week highlighted that Alameda had ~40% of its $14.6B in assets in FTX’s native crypto, $FTT.
- The two are so entangled that any trouble with Alameda could spill over to FTX.
Traders are speculating that Alameda could already be in financial trouble.
This spooked investors. FTX saw heavy withdrawals in the past few days, and even the CEO of competitor crypto exchange Binance said they would sell $530M of $FTT.
Crypto is already on shaky grounds, and even the slightest tremor will send investors panicking.
Flashback to Celsius and Voyager. Both major crypto platforms filed for bankruptcy earlier this year:
- 500,000 users still have funds locked in Celsius — and it’s uncertain whether they’ll get their money back.
- Voyager is considering selling its assets to FTX. Customers are expected to receive a portion of their funds to be paid by the acquirer.
So when investors heard FTX was in trouble, the first thought was: Are my assets safe in FTX?
Yesterday, SBF tried reassuring investors on Twitter:
The Average Joe: “Better safe than sorry.”