As the world finds itself dealing with one of its worst economic crises, it is important to remember those who are getting worse off as a result. Even when you may be able to get through, it is only a matter of time before this situation continues and your livelihood will be affected negatively. Thankfully, there are ways in which individuals can take control of how they handle these situations. Here’s what we have learned from recent reports on cryptocurrency assets that went missing from an already struggling financial institution.
FTX filed for bankruptcy protection after millions deposited in their wallet were frozen last week. More than 200 million dollars worth of digital tokens was frozen for two days at 3AM local time on Saturday. However, these funds were returned a few hours earlier when more funds got into FTX’s custody.
In total, about 800 megatons worth of Bitcoin, Dogecoin, Ether, Cardano, Shiba Inu, Solana, Monero, Chainlink, Binance Smart Chain, Avalanche, Cosmos, Luna, Zcash, Terra Luna and Uniswap has been frozen by FTX since April 5th and all funds have been retrieved. According to data from CoinDesk, some 850,000 cards were withdrawn, while the remaining balance stands at more than 8,800,000. The recovery process took just under three weeks.
Last week, FTX Chief Operating Officer John Cappelli said “We had no idea anything would happen because we weren’t involved in any processes or discussions. We just thought we were going to liquidate at any point. I just know people were worried about money and they were like ‘I don’t have enough bitcoin to survive this anymore.’ That was really hard to hear and sad.” He also mentioned that the company needs more than $100 million in additional capital to recover all assets.
To avoid such similar cases in the future, FTX should establish clear policies around safeguarding account security and privacy. This is necessary because otherwise, investors could potentially lose faith in cryptocurrencies and stop investing. They must also make sure to ensure proper oversight of user activity and not allow third parties access to private keys.
The US Securities and Exchange Commission (SEC) has approved FTX’s request to implement certain measures designed to comply with federal securities law. These include setting up special deposit accounts for public shareholders, providing investor rights that give them access on demand, allowing limited reporting requirements, restricting disclosure, implementing anti-fraud and cyber-security programs and establishing compliance plans.
While most crypto exchanges in the market are facing liquidity challenges due to low trading volumes in general and high demand, the new insolvency process could provide hope for potential holders. It will help to prevent further losses, and most importantly; the companies will regain faith in cryptocurrencies.
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FTX offers a comprehensive range of services including trade execution platform, spot trading, futures and options, perpetual contracts, margin trading, leverage trading, portfolio management solutions, order book management tools, risk mitigation software, forex trading education, web development and other support services. Since inception, FTX has successfully grown to become one of Europe’s largest cryptocurrency exchanges with over 1 million registered users and approximately US$1 billion daily volume. To learn more about us visit our website www.ftx.com.
Disclaimer – Forward-Looking Statements: The information contained within this article, including the statements which constitute forward-looking statements, reflect the current views of FTX and are subject to various inherent risks and uncertainties. You should understand that the material provided herein (including advice and information contained therein) is not intended to be used, and readers are advised not to use, these materials as the basis for making any investment decision. All information provided within this publication is considered as of date of publication and is subject to change without prior notice. Although we have based this information on reasonable assumptions, we realize that the information available does not reflect all risks for which FTX is liable. Consequently, readers are advised to obtain copies of any relevant prospectus or legal document made available, if available, which identify and address other important factors that could influence the financial position of any particular person prior to purchasing any specified product(s). Readers are encouraged to read the applicable laws and regulations concerning the products of FTX before making a purchase decision. Moreover, we do not give any warranty or guarantee on the timeliness, completeness or accuracy of the content included in this document. Any implied warranties contained herein will be expressly renounced by FTX except in accordance with its terms and conditions of service. None of The Pinnacle Group Plc, The National Stock Exchange Ltd. or its Regulation Services Provider undertakes to update any of the information contained in this newspaper, and the above mentioned websites are maintained by Global Finance Service Limited which is entitled to represent FTX in relation to intellectual property issues. Past performance is not indicative of future results. All information contained within this document is presented solely for informational purposes and must not be relied upon as a promise or representation regarding past results. Neither FTX nor any of the persons mentioned herein shall be responsible for any loss resulting from the use of any information contained herein. Other than as required under applicable law, FTX disclaims any obligation to revise or review any information contained within the document, as well as any responsibility which may be imposed on any person or entity which relies thereon.