Former Kraken CEO talks FTX Crisis will take years to recover

• Kraken’s Former CEO Jesse Powell discussed the impacts of the FTX crash over the crypto industry.
• FTX has led to a huge loss in the entire crypto market bringing major cryptocurrencies decline in their value.
• Kraken freezes accounts of FTX Group including Alameda Research.

What Former CEO Addressed ?

Kraken exchange founder and Former CEO, Jesse Powell, talks about the impact of the FTX crash on the entire crypto industry.

Once regarded as the fourth largest exchange FTX files for bankruptcy under Chapter 11 on 11 November,2022. Previously, an estimated $6 billion was withdrawn within a week. As a result of which, the platform decided to stop withdrawal of funds.

Following the ‘Great Resignation’, Jesse Powell also resigned from his position of CEO of the crypto exchange. As per the sources, he came to this decision being worried about bending to ‘regulatory demand’. But he still is on the Board. 

Additionally, many other CEOs such as Michael Saylor of Microstrategy, Michael Moro of Genesis, etc are the ones who have stepped down from their respective positions. Not only this, the recent market downturn has also led to the mass ‘layoffs’ of the workforce.

It all started from the Luna Terra collapse, which turned the crypto world into the darkness of crypto winter. It has led to Three Arrow Capital, Voyager Digitals and Celsius Network to file for bankruptcy.

‘Bank Run’ FTX and the Market

According to the Bloomberg Billionaire Index, Sam Bankman-Fried no longer qualifies for the list. On 8 November, his wealth declined from a whopping $16 billion to $991 million. The FTX crash has led to the entire crypto market capitalization decline from $1.02 trillion to $824 billion in a week slumping almost 20%. 

It has also produced a great Ripple effect on the major cryptocurrencies such as BTC ($16,764.79), Solana ($14.09) and Dogecoin ($0.08677) have been noticed a sharp decline in their values.The market is showing bearish sentiments.This is because of FTX inefficiency to solve the problem of ‘Liquidity Crunch’.

Its impact is not only restricted to US,Western and European nations but also globally. Crypto veterans caution investors to remain away from FTT tokens. Any choice of making quick money will be a bad option as the recovery of FTT tokens is not even confirmed and if it takes place, it will take a lot of time.

According to CNBC, Chairman of the Securities and Exchange Commission (SEC) Gary Gensler compares FTX collapse to the Luna Terra crash and the downfall of other companies this crypto winter has given.

He said- “This is a very interconnected world of crypto with a few concentrated players in the middle.” He also remarked that the FTX was functioning in a “toxic combination” which resulted in many investors losing a huge amount of money. The crypto exchange Kraken has also freezed the accounts of FTX Group, Alameda Research and their executives in order to safeguard the interests of their creditors.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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