On news that the carnage in the crypto space will impact far more than one exchange, tokens slipped Friday, and FTX coin led the decline following news of the firm’s bankruptcy.
FTT has tanked around 19% in the past 24 hours, putting its seven-day decline at around -90%. Bitcoin and ether, which both posted double-digit gains on Thursday, fell back into old patterns Friday and lost 5% and 4%, respectively, as of 10:30am ET.
“I’m really sorry, again, that we ended up here,” Bankman-Fried said on Twitter Friday. “Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.”
Sam Bankman-Fried is stepping down from his position as CEO of the FTX Group, the official FTX Twitter account announced Friday morning. Around 130 companies affiliated with Bankman-Fried’s FTX Group have also commenced voluntary bankruptcy proceedings.
“The market is in flux, and it would be pointless to try and make any short to medium-term predictions right now,” Chainalysis analysts wrote in a note Friday.
Investors are nervous, Chanalysis analysts said, pointing to increasing crypto-to-stablecoin and crypto-to-USD trading volume on exchanges.
“In times of volatility and panic, we’d expect crypto users to seek shelter with the stability of fiat currencies,” the note read. “There are two ways to do this: Trading for stablecoins pegged to fiat currencies like the U.S. dollar, or liquidating entirely and swapping cryptocurrency for fiat.”
The contagion has already set in across the industry. Crypto lender BlockFi, which FTX bailed out earlier this year amid 2022’s first round of crypto turmoil, has suspended withdrawals. The suspension comes only two days after the lender assured users that it was fully operational.
BlockFi said the uncertainty surrounding FTX.com, FTX US, and Alameda Research makes it unable to operate as usual in a Tweet Thursday.
“Co-founder Flori Marquez had earlier tweeted the firm remained an independent entity despite its bailout deal with FTX — implying that it was mostly unaffected by the exchange’s implosion,” Ryan Selkis, Messari founder, said in a note Friday. “The meltdown of crypto exchange FTX is heavily impacting markets — but on a more personal level, employees who believed they worked for one of the most credible crypto platforms are reeling.”
A Canadian teacher pension fund also reported exposure, to the tune of roughly $95 million tied up in Bankman-Fried’s empire, per Financial Post.
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Source: https://blockworks.co/news/cryptos-erase-gains-ftx-token-slips-further-on-bankruptcy-news/