As regulators scrutinise FTX, rival exchanges try to reassure investors

Date:

  • Crypto.com CEO Says It Will Publish Proof Of Reserves
  • Bitcoin Stabilizes Around $16,700
  • Binance CEO plans ‘industry recovery fund’
  • Smaller stock exchange AAX stops withdrawals

SINGAPORE/LONDON, Nov. 14 (Reuters) – Bitcoin and other cryptocurrencies continued to be under pressure on Monday after the collapse of crypto exchange FTX last week, as rival exchanges tried to reassure nervous investors of their own stability.

Kris Marszalek, CEO of Singapore-based crypto exchange Crypto.com, refuted suggestions it could be in trouble, saying in a YouTube livestream address that the platform would prove all naysayers wrong.

The “AMA (ask-me-anything)” session came after investors took to Twitter over the weekend to question a $400 million transfer of ether tokens to the Gate.io exchange on October 21.

Marszalek had tweeted Sunday to say that the ether had been recovered and returned to the exchange, but the Wall Street Journal reported that recordings at Crypto.com rose this weekend.

An audited proof of the exchange’s reserve report will be published in weeks, Marszalek said Monday, adding that the exchange did not engage in “irresponsible lending products”.

Crypto.com ranks among the top 10 exchanges worldwide by revenue, but smaller than FTX and market leader Binance. It made headlines in 2021 by signing a $700 million deal to rename Los Angeles’ Staples Center as the Crypto.com Arena, and get actor Matt Damon to promote the platform.

FTX filed for bankruptcy on Friday, one of its most notable crypto explosions, after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance exited a proposed bailout deal.

It was engulfed in more chaos on Saturday after it said it had detected unauthorized access and analysts said hundreds of millions of dollars of assets had been moved from the platform under “suspicious circumstances”.

New FTX chief executive John J. Ray III said on Saturday that the company is working with law enforcement and regulators to mitigate the problem, and that it is “doing everything possible” to secure assets. Former CEO and FTX founder Sam Bankman-Fried has previously told Reuters that some of the transfers from FTX were the result of “confusing internal labeling”.

Another crypto exchange, Kraken, said on Twitter on Sunday that it had frozen the accounts of FTX, its affiliated crypto trading firm Alameda Research and their executives.

“We have been actively monitoring recent developments with the FTX estate, are in contact with law enforcement agencies, and have frozen Kraken account access to certain funds that we suspect are associated with ‘fraud, negligence or misconduct’ in relation to to FTX,” said a Kraken spokesperson. said in a statement.

Bitcoin slumped back below $16,000 early Monday before recovering to trade at $16,774, up 2.8% on the day. Still, with losses so far in November of 18%, it remains poised for the biggest monthly drop in percentage terms since June, when the fallout from the failure of the stablecoin TerraUSD rocked markets.

FTX’s token was worth just $1.3, down 94% in November, while Crypto.com’s Cronos token has halved to $0.06 in the past week, according to pricing site Coingecko

INVESTOR NERVES

The collapse of FTX has made investors nervous as unverified rumors circulate, even as exchanges release details of their reserves and promise further disclosures.

“One of the theories floating around is that the exchanges are going to move crypto to bolster their balances and make everything look good, even if it’s anything but,” said Zennon Kapron, founder of fintech consultancy Kapronasia.

“It’s like someone shows someone a bank statement that you had $100 in your account this afternoon at 2:00 PM. At 1:00 PM it might have been $1 and someone just transferred you $99, and at 4:00 PM you’re going to send it back. .. A snapshot tells us very little about the actual health of an exchange.”

Separately, the smaller, Asian-based exchange AAX halted withdrawals over the weekend, citing outages at an undisclosed third-party partner during a planned system update.

AAX said it hopes to resume regular operations for all users within 7-10 days, but noted in a note to customers that: “In light of the insolvency of one of the largest players in our industry last week, crypto users are right to be concerned about the operational and financial stability of centralized exchanges of digital assets”.

Changpeng Zhao, chief executive of Binance, the world’s largest crypto exchange, tweeted that he would be looking at an industry recovery fund to help projects that “were otherwise strong but in liquidity crisis,” adding that more details would follow.

Binance signed a non-binding letter of intent last week to buy FTX’s non-U.S. assets, but later abandoned the deal, hastening bankruptcy.

Zhao has since warned of a “cascading” crypto crisis.

Meanwhile, regulators continued to circle FTX, which itself had been a white knight investor for crypto projects failing over the summer.

The Bahamas securities regulator and financial investigators are investigating possible misconduct following the collapse of FTX, the Royal Bahamas Police Force said Sunday.

Visa Inc (UN), the world’s largest payment processor, said Sunday it was breaking its global credit card agreements with FTX.

Additional reporting by Xinghui Kok in Singapore and Elizabeth Howcroft in London; Editing by Sam Holmes, Kirsten Donovan

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Popular

More like this
Related

Leaning into culture war issues keeps the focus off Social Security.

Leaning on culture war issues keeps the focus away...

Tips on how to avoid Social Security schemes

CHICOPEE, Mass. (WWLP) - If you or someone...

Rays Close To Contract Extension With Yandy Diaz

The Rays and infielder Yandy Diaz are close to...