Categories
Shared Links And Posts - trumpinvestigations.net

Regulators circle FTX as rival exchanges try to calm investors

Advertisements | Advertising at The News And Times - advertising-newsandtimes.com | WE CONNECT!
Spread the news

Listen to this article
2022-11-14T17:08:39Z

The fallout from the collapse of crypto exchange FTX kept bitcoin and other cryptocurrencies under pressure on Monday, with market participants worrying about heavy withdrawals at Singapore-based exchange Crypto.com. Julian Satterthwaite reports.

The logo of FTX is seen at the entrance of the FTX Arena in Miami, Florida, U.S., November 12, 2022. REUTERS/Marco Bello

Bitcoin and other cryptocurrencies were under pressure on Monday following last week’s spectacular collapse of crypto exchange FTX, while rival exchanges sought to reassure jittery investors of their own stability.

Kris Marszalek, chief executive of Singapore-based crypto exchange Crypto.com, rebutted suggestions it was in trouble, saying in a YouTube livestream 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 transfer of $400 million worth of ether tokens to the Gate.io exchange on Oct. 21.

Marszalek tweeted on Sunday that the ether was recovered and returned to the exchange, but the Wall Street Journal reported withdrawals at Crypto.com rose over the weekend.

An audited proof of the exchange’s reserves will be published within weeks, Marszalek said on Monday. The exchange did not engage in any “irresponsible lending products,” he added.

A Crypto.com spokesperson did not respond to a request for comment on whether the platform’s outflows continued on Monday.

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

FTX filed for bankruptcy on Friday in one of the highest-profile crypto blowups after frenzied traders withdrew $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

The crypto exchange’s collapse is being probed by multiple authorities, including U.S. prosecutors in Manhattan, a source with knowledge of the investigations said on Monday.

LedgerX LLC, an FTX subsidiary, on Monday formally withdrew its request from last December with the U.S. Commodity Futures Trading Commission to allow it to offer products that are not fully collateralized.

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

New FTX Chief Executive John Ray said on Saturday the company was working with law enforcement and regulators to mitigate the problem, and was making “every effort” to secure assets. Former CEO and FTX founder Sam Bankman-Fried previously told Reuters some of the transfers out of FTX were a result of “confusing internal labeling.”

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

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

Bitcoin slid back below $16,000 early on Monday before recovering to trade at $16,574, up 1.62% at 11 a.m. EST (1600 GMT). Still, down 18% so far in November, bitcoin is set for its biggest monthly percentage fall since June when the fallout from the failure of stablecoin TerraUSD roiled markets.

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

FTX’s collapse has left investors nervous amid unverified rumors, even as exchanges publish details of their reserves and promise further disclosures.

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

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

Separately, smaller, Asia-based exchange AAX halted withdrawals over the weekend, citing failures at an unnamed third-party partner during a scheduled-system update.

AAX said it hoped to resume regular operations in seven to 10 days, but in a note to customers said: “In light of the insolvency of one of our industry’s largest players last week, crypto users are rightfully concerned about the operational and financial stability of centralized digital asset exchanges”.

Changpeng Zhao, CEO of Binance, the world’s largest crypto exchange, said he would look to create an industry recovery fund to help projects that were “otherwise strong but in a liquidity crisis.”

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

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

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

The Bahamas securities regulator and financial investigators are investigating potential misconduct over FTX’s collapse, the Royal Bahamas Police Force said on Sunday.

Visa Inc (V.N), the world’s largest payments processor, said on Sunday it was severing its global credit card agreements with FTX.


Spread the news
Advertisements | Advertising at The News And Times - advertising-newsandtimes.com | WE CONNECT!
WP Radio
WP Radio
OFFLINE LIVE