This week in crypto: FTX files for Chapter 11 bankruptcy
It has been a rollercoaster of a week, even for the cryptocurrency market standard, with FTX filing for bankruptcy.
Crypto exchange FTX files for bankruptcy
This is perhaps the most action-filled week in the cryptocurrency space since the start of the week. FTX, one of the leading cryptocurrency exchanges in the world, has filed for bankruptcy after a series of events that showed how poorly Sam Bankman-Fried handled the company.
Earlier this week, Binance revealed that it would liquidate $584 million worth of FTT tokens, with Changpeng Zhao revealing that the decision was due to some information that came to light.
FTX began to face liquidity issues afterward, with reports indicating that FTX used customer funds to fund Alameda Research, the hedge fund owned by Bankman-Fried.
Binance offered to acquire FTX and take on its liabilities but later pulled out of the deal after looking at FTX’s books.
FTX announced earlier today that it has now filed for Chapter 11 bankruptcy, alongside numerous companies affiliated with FTX, including FTX US and Alameda Research.
Furthermore, CEO Sam Bankman-Fried has resigned from his position, and Chicago-based attorney John J. Ray III has been appointed to take the position. The cryptocurrency exchange is seeking bankruptcy protection in Delaware.
FTX is currently under investigation in the United States by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
FTX is also at risk of losing its licence in Europe following the collapse of the cryptocurrency exchange.
$150 Billion was wiped from the crypto market this week
The cryptocurrency market sustained massive losses this week, all thanks to FTX’s collapse. The total cryptocurrency market cap was above $1 trillion by the end of last week.
However, at the time of this report, the total crypto market cap stands at $852 billion. Bitcoin has lost 19.5% of its value this week and is now trading at around $16k per coin. Ether is also down by 22% this week and is now trading around $1,200.
Crypto.com pauses USDC and USDT withdrawals on the Solana network
In another bearish news this week, crypto exchange Crypto.com notified its customers that it had halted the withdrawals of USDT and USDC stablecoins on the Solana network.
Crypto.com said the move was immediate, and users can also not deposit USDT and USDC stablecoins via the Solana network. USDT and USDC remain available via other networks, including Ethereum and Cronos.
Binance tops up its emergency fund
Following the FTX collapse, most cryptocurrency companies were on the defensive this week. Most companies came out to reveal whether they had any funds tied up with FTX and if they could handle the resulting effect.
Binance, the world’s leading cryptocurrency exchange, revealed that it had topped up the Binance Secure Asset Funds for Users (SAFU) to $1 billion. The crypto exchange said the amount had dipped to $735 million since the start of the year due to the ongoing crypto winter. The move is seen as an assurance from Binance that user funds are safe on the platform.
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