Nov. 11 (Reuters) – Cryptocurrency exchange FTX filed for U.S. bankruptcy on Friday, prompting Sam Bankman-Fried to step down as CEO.
FTX, its affiliated cryptocurrency trading fund Alameda Research, and about 130 companies have initiated voluntary Chapter 11 bankruptcy proceedings in Delaware, FTX said.
Shares of cryptocurrency and blockchain-related companies fell Friday after one of the biggest crypto exchanges, FTX, announced that it had entered bankruptcy proceedings in the United States, potentially triggering a massive meltdown in the industry. Did.
Denise Dick, Market Structures Analyst and Trader at Triple D Trading
“The bankruptcy filing was filed just before trading opened, so it really hit the entire stock market.”
“A lot of the bad news was already priced in. You might think these stocks would drop a lot with this news, but actually a lot of stocks dropped a lot. The drop was bought. .”
THOMAS HAYES, MANAGING MEMBER OF GREAT HILL CAPITAL LLC, NEW YORK
“It’s about selling rumors. Now we have news. What we feared is happening now. I wouldn’t be surprised if cryptocurrencies start to find a bottom in the next few days.” prize.”
“What came as a shock was finding out that this man was the face of the cryptocurrency industry and that the emperor was not wearing any clothes. I think it’s a loss of credibility in the class.” It’s going to have to be done. ”
Jay Hatfield, CEO of Infrastructure Capital Management in New York
“Bitcoin falls when bankruptcy is announced in a big way, and owning bitcoin tends to pull most of the crypto-related stocks like MicroStrategy down.”
“Well, they’ve hit pretty hard already. And overall, after the inflation report, we’re on the upside. All of these securities are data-high and risky, so if the market goes up, Drag them higher.”
SECURITIZE CAPITAL INVESTMENT ADVISOR JOSEPH EDWARDS
“The main danger here is that US entities are involved. This essentially means that the risk of contagion is very close to existing problems due to regulatory implications. .”
“The failure here was essentially an industry structural failure, not an asset class failure, but once US entities and authorities start to get involved, the difference between the two starts to blur.”
ERIC CHEN, CEO and Co-Founder of Injective Labs
“Today’s events are likely to cause knock-on effects across the regulatory environment, given that SBF was a major contributor to the election (sixth largest contributor overall), so politicians It is likely that there will be a negative feeling that centralized crypto exchanges will move forward.
“Washington has lost one of its most important voices in cryptocurrency. We don’t know exactly who will fill that gap in the short term. I think it will be short-lived.
“I think what has happened over the past few days will only add more fuel to the broader decentralization narrative and how important it is for users to have unlimited access to their funds at any time. , participants will become more wary of centralized platforms and exchanges where cryptocurrencies are a major boon to decentralized finance as a whole.”
Omid Malekhan, adjunct professor at Columbia Business School
“The ‘content’ of this latest crisis is that FTX did something with client funds that exchanges shouldn’t have, and it appears that some amounts are currently missing. We need more information to know how long it has been and how much we can recover.
“‘How’ is even harder to answer, because unlike Terra, which is always questionable, and Celsius, which can face execution just like any other lender, FTX is almost universally recognized as safe. Crypto player CEO SBF has a leadership role in regulation etc. and it seems almost pathological for someone to run a massive scam while working with Congress to wipe out the industry Ultimately, the lesson here is don’t trust the cult of personality no matter how well-meaning the crypto industry may seem.”
Richard Gardner, Chief Executive Officer of MODULUS GLOBAL, Software Provider to High-Ticket Wall Street Clients
“It’s certainly no surprise that FTX finds itself in this situation in the first place. SBF’s free-wheeling approach to industry integration was ill-considered from the start. Economic crisis. To find the best deals related to the most desirable institutions, the waiting game is in place. It was a surefire way to entice them.
GREG KIDD, co-founder of VC firm HARD YAKA
“Sam and FTX have been playing a great long term strategy game (chess). When FTX crossed the line and tried to help Alameda weather the storm, the trap kicked in and It brought the entire SBF ecosystem to its knees.
“CZ and Binance pulled Coinbase and Circle’s USDC off their exchanges last month, sapping liquidity from the world’s second most popular stablecoin and prioritizing their own stablecoins. Highlander’s hardline tactics carried the day once again, strengthening Binance’s hands, the second and third best players in the industry.
“It’s been a rough and tumbled world and it’s gotten rougher. In the long term, CZ/Binance has been a conduit for North’s money laundering revenues, benefiting something like the Russian Silk Road.” South Korean hackers could make a comeback of their own against lenient compliance controls.”
John Griffin, CEO and founder of INTEGRA FEC, which provides consulting services to government agencies and law firms investigating financial fraud, and Professor of Finance at the University of Texas
“The next question is how much this will affect other exchanges and where the next potential loss will be.
“Usually there is a lot of cross-collateral. If a major entity like this goes bankrupt, how much will all the assets associated with that FTX exchange fall? It’s kind of a big financial crisis. FTX Custodians or assets related to. Someone else may go down.
“Because of the lack of trust in the crypto space, you may not be able to withdraw crypto (from other players) because you don’t know if someone else will go bankrupt. You can withdraw and put it on, which removes a lot of cross-collateral and makes the system more leveraged, putting downward pressure on the price of cryptocurrencies and possibly causing other players to fail .
“Alameda appears to be billions of dollars short of debt, which means they owe someone billions of dollars. and potentially wipe out those entities. Basically there is an incentive to break all counterparties and you want to eliminate counterparty risk, e.g. get out of derivatives trading, because you pull everything into hard cash , other cryptos to sell bitcoin or raise cash. It puts downward pressure on cryptos.
Edited by the Global Finance & Markets Breaking News team.Edited by Richard Chan
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