The crypto world was dealt a major blow this week as FTX, one of the largest cryptocurrency exchanges, filed for Chapter 11 bankruptcy protection.
This followed a massive sell-off of the company’s native token, FTT, which lost over 80 percent of its value.
FTX’s collapse could have far-reaching implications for the entire crypto industry, according to Ran Neuner, Host and Founder of Crypto Banter.
The Impact of FTX’s Collapse
Neuner said that the collapse of FTX could lead to a loss of trust in the crypto industry as a whole.
“There is a rumour in the industry, and I can’t confirm it because I haven’t seen the papers but it comes from a reliable source, that BlockFi… had a loan to FTX collateralized by FTT,” said Neuner. “FTT is now worth zero and FTX can’t repay the loan.”
“We’ve had a cascade of failures [in the crypto industry],” he continued. “The centralized players seem to have a systematic failure because of greed, because of over-leverage, and stuff like that.”
These speculations have caused some serious concerns about the safety of cryptocurrencies held in coin exchanges.
When asked which exchanges are safe, Neuner said, “Right now, we don’t know.”
This lack of certainty is troubling for many people who have invested their money in cryptocurrencies.
If exchanges are not safe, then there is a very real risk that people could lose their hard-earned money.
The situation is made even more worrisome by the fact that there is no governing body regulating these exchanges.
This means that if something goes wrong, there is no one to turn to for help.
