The cryptocurrency market is expanding in the mainstream financial market. With this, it is becoming a new favorite of many investors out there. To get a fair idea of BTC trading, visit bitcoins-evolution.com. They are opting for digital currencies for their investments over other assets. With this rising demand, many new Crypto exchanges are being established.
Despite the huge demand, many Cryptocurrency exchanges tend to fail as well. A recent instance of this situation is that of a large Cryptocurrency exchange, FTX. This exchange is going through a tough time at present and experiencing huge losses.
It is passing through a tough phase of being bankrupted. Also, some of its major associates are leaving the firm! Read this blog to find out more about FTX’s condition!
FTX’s Failure and Present Scenario
FTX is on the verge of downfall despite being among the top Cryptocurrency exchanges. This firm is now falling short of more than billions of dollars while facing Cryptocurrency equal to that of a bank run! After all these incidents, the firm sought protection against bankruptcy in the initial days of this month.
With all these aspects taking place, the firm’s founder and CEO resigned from their position too! Meanwhile, the firm faced certain unauthorized access that stole the majority of its funds. The analysts of this industry are assuming that the losses may be around hundreds of millions of dollars!
The collapse of this giant firm is a shock for the entire Cryptocurrency industry. And there are different reasons behind this firm’s bankruptcy.
Causes Of FTX’s Bankruptcy
There is general tension and fear among investors against this Crypto firm. Investors left this exchange by assuming that it had insufficient funds to cover up its investments.
After this, it decided to sell the entire firm to its toughest competitor, Binance. But there was a halt in this process as well. This was on the part of Binance as it left the balance sheet of FTX pending. The total value of all the assets of FTX ranges from 10 billion to 50 billion USD. Also, it has over 130 affiliate firms worldwide, as per FTX’s bankruptcy filing.
The firm along with the hedge fund of its founders and other affiliate firms filed this petition. The filing of this bankruptcy petition was done in Delaware. These events are proving to be shocking for their founder as well. Because earlier he was considered a savior who helped other collapsing Crypto firms.
Did FTX Face Cyber Hacks?
After filing the petition against bankruptcy, the firm announced that it faced unknown access in its network. After certain hours of filing the petition, they faced unknown access. With this, the firm lost a huge amount of funds. Though the exact amount is not announced by the firm, analysts are assuming it to be a huge sum!
Experts are even predicting that it might be an insider of the firm who removed the funds. With this, whether FTX was truly hacked or not is an unclear notion at present.
Is BTC Safe from Such Exchanges?
The CEO of Bitcoin Swan says that investors who are holding BTC should not worry much. If you are holding BTC, keep it away from risky exchanges. Because exchanges like FTX are like Cryptocurrency casino sites.
Though some exchanges hold a high reputation and assure you of security, keeping your assets safe is your duty. Taking complete control of your digital assets is a safer option. And, Bitcoin offers this facility where you can control your assets. Also, you can keep your BTC away from these exchanges!
Investigation Of FTX
The bankrupt Crypto firm, FTX, is under certain investigation at present. Different agencies are keeping a close eye on the firm and investigating in their way. Police forces of the Bahamas and some departments in the US are investigating this aspect.
All these forces are looking out for any misconduct or other criminal activities that might have taken place in FTX. But the agencies are not disclosing any information about their investigation so far!
Conclusion
With the terrible downfall of FTX, the prices of many coins are falling as well. Also, the regulators of the market are asking for stricter rules in the market. Most of the deals of FTX are falling apart and the brands are leaving this firm!