The FTX collapse last week continues to unravel and gave far-reaching implications across the decentralised finance space, with the price of cryptocurrency Solana getting crushed, whilst other exchanges, including Crypto.com, are being put in the spotlight.
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FTX Still Unravelling
The major crypto exchange, FTX continues to grab the headlines with the ongoing unravelling of the empire of ‘King of Crypto’ Sam Bankman-Fried. FTX has filed for bankruptcy, and CEO, Bankman-Fried, has stepped down. He is now facing investigations from the federal government regarding his handling of the finances of the company.
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By filing for Chapter 11 bankruptcy, the crypto exchange can continue to operate under court supervision whilst attempting to restructure its debts. But the estimated 1.2 million FTX users who were using the exchange to buy various cryptocurrencies are not hopeful of ever getting back their investments that are in FTX’s digital wallets.
FTYX has a new chief executive, a lawyer with experience in high-profile bankruptcy cases, John J Ray III. He stated, “The FTX Group has valuable assets that can only be effectively administered in an organised, joint process.”
Solana Crushed
The cryptocurrency, Solana (SOL), has been a significant casualty in the fallout from the FTX collapse. At its lowest point, the Solana price had plunged by over 60% in the past week since the FTX crisis surfaced and is now down 95% from its record high from November 2021!
The primary reason for Solana’s aggressive price decline relative to other major cryptocurrencies is a link to FTX via an on-chain crypto exchange and liquidity hub called project Serum, created by FTX founder Sam Bankman-Fried. It seems any connection to Bankman-Fried and FTX is enough to see an aggressive contagion impact, bringing Serum and Solana into a negative spotlight by association.
Binance Chief, CZ, Warns on Crypto.Com
Changpeng Zhao, who goes by the nickname “CZ” is the CEO of the world’s largest cryptocurrency exchange, Binance, and was one of the first to point out concerns regarding FTX in a tweet last weekend. Now, CZ has cast a negative shadow again, tweeting “If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU”.
This was in the wake of the major cryptocurrency exchange, Crypto.com, accidently transferring $360 million worth of Ethereum (more than 300,000), off of its exchange.
Although this was explained away in a tweet by chief executive of Crypto.com, Kris Marszalek, it would seem that CZ and many others in the decentralised finance world are not so sure.
