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Sunday Review Business

Aftershocks in the massive earthquake Last week, the crypto industry was worth a trillion dollars and continues to reverberate Monday

As the market crisis that has been ravaging it worsened over the weekend, digital currency prices fell once more. Bitcoin, the world’s biggest cryptocurrency, has plummeted about 65% so far this year. It traded at approximately $16,500 on Monday according to CoinMarketCap. CoinDesk. Analysts think it could fall below $10,000.

Ether, the world’s second most valuable cryptocurrency, isn’t faring much better. CoinDesk data revealed that it was trading at $1,230 Monday after having fallen more than 20% in the past week.

As investors struggle to deal with the shocking implosion in FTX (one of the most powerful and influential players in the sector), the plunge is imminent.

Some industry insiders have said the company’s downfall had triggered a “Lehman moment,” This refers to the 2008 collapse and subsequent shockwaves in the global investment banking industry.

This episode will not only destroy confidence in the crypto sector, but also encourage global regulators to tighten their screws. Many of the most prominent names in the industry stated that they welcome the scrutiny if it helps restore confidence in the industry.

There is an a “lot of risk,” Changpeng Zhao, Binance’s largest employer, said, “The biggest company in China is Binance.” crypto exchange. “We have seen in the past week things go crazy in the industry, so we do need some regulations, we do need to do this properly,” He added.

CZ, as he’s known, was speaking at a conference in Indonesia on Monday. He stated last week that he compared the current crypto turmoil with the 2008 global financial crisis. “probably an accurate analogy.”

Binance Earlier this year, FTX and FT reached a tentative rescue plan. This transaction fell apart almost instantly after it was completed.

After a downward spiral, FTX continued to slide. filing for bankruptcy Friday. Another prominent name in the industry also admitted to mishandling money, further scaring investors.

These are the events that have occurred over the past few days. It is clear that the crisis has just begun.

FTX relocated its headquarters from Hong Kong last year to The Bahamas. Former CEO Sam Bankman Fried hailed it as “a great move.” “one of the few places to set up a comprehensive framework for crypto” It was at that time.

The Bahamas authorities said Sunday that they are investigating possible criminal activity criminal misconduct surrounding the company’s implosion.

“In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred,” In a statement, the Royal Bahamas Police Force stated.

It’s not clear which particular aspect of the swift collapse of FTX authorities are investigating.

Bankman-Fried was the founder of the exchange at the age of 30. One of the most prominent figures in the crypto industry, amassing a fortune that once exceeded $25 billion. It has since vanished. He had been viewed as the crypto world’s white knight, stepping in previously to rescue companies struggling after the collapse of the TerraUSD stablecoin in May.

FTX quickly rose to be one of the largest crypto exchanges worldwide, thanks to the backing of elite investors like Sequoia Capital or BlackRock. Its collapse was preceded by the decision to lend billions of dollars’ worth of customer assets to fund risky bets by Alameda, Bankman-Fried’s crypto hedge fund, The Wall Street Journal This report was published on Thursday.

The Bahamas probe was launched a day after the bankrupt exchange announced it was conducting its own investigation.

FTX stated Saturday that it was investigating whether crypto assets were stolen. Elliptic, a crypto risk management company, stated that $473 million worth of crypto assets appears to have been nabbed by FTX.

Ryne, FTX General Counsel Miller, said Saturday that the company “initiated precautionary steps” On Friday, all digital assets were moved offline. Friday evening, the process was expedited “to mitigate damage upon observing unauthorized transactions.”

Miller said that FTX is “investigating abnormalities” Information regarding crypto wallet movements “related to consolidation of FTX balances across exchanges.”

He said that the facts are still not clear and that the company would share more information as soon possible., a Singapore-based company that deals in crypto, admitted to sending over $400 million in ether to an incorrect account.

CEO Kris Marszalek said Sunday Three weeks ago, 320,000 ETH were transferred to a corporate account on instead of one of its offline accounts. “cold,” wallets.

Despite the fact that the funds were recovered from the platform users are withdrawing their funds, afraid it will collapse just like FTX.

“We have since strengthened our process and systems to better manage these internal transfers,” Marszalek tweeted Sunday. The platform’s native token has fallen over 20% in the last 24 hours, according to CoinDesk.

Marszalek stated Monday that his company has been acting as an agent for a “responsible, regulated player since inception” We will soon be able to do so “prove all the naysayers …wrong with our actions.” boasts 70 million users worldwide and its business model is “completely different” He added that FTX was the source.

“We never took any third-party risks, we do not run a hedge fund, we do not trade customer assets,” He stated.

Marszalek stated that his company will soon publish an audited document showing its reserves.

At the conference in Bali, Binance boss Zhao signaled that regulating the industry won’t be easy.

Authorities’ “natural response is to borrow regulations from traditional banking systems … but crypto exchanges operate very, very differently from banks,” He stated.

“It is very, very normal for a bank to move user assets for investments and try to make returns,” He elaborated. He explained that a crypto exchange can only function in this way. “almost guaranteed to go down,” He said. He said that the whole industry could play a part in protecting consumers.

“Regulators have a role… but no can can protect a bad player,” He stated.

— Matt Egan, Ramishah Maruf and Allison Morrow contributed to this report.