All cryptocurrency markets are still suffering from a significant decline in prices due to the repercussions of the collapse of the empire of Sam Bankman Fried “FTX” (FTX), as the crisis revealed the extent of the company’s manipulation of investors’ funds and use them to borrow without any financial cover sufficient to pay the withdrawals of clients that have collapsed The company for fear of collapse.
One of the most important repercussions of this crisis is also not only the fall in prices and the loss of confidence, but there are many other financial institutions such as the cryptocurrency lending platform “BlockFi”, which is the next in the series of collapse, according to insiders of the company, as some managers admitted The platform is preparing to declare bankruptcy within days.
Research into the wreckage of the FTX bankruptcy showed that there are $3.1 billion owed to major creditors, and the amount of money owed raises fears of further collapses among digital asset groups.
The main currency, Bitcoin, fell about 2.5% over two days, while “Ethereum” – which ranks second – fell by about 6%, and the cryptocurrency “Dogecoin”, one of the most speculative assets in the digital arena, fell by 12%.
Ethereum has fared worse than Bitcoin over the past few trading sessions in part due to speculation that a portion of the $663 million withdrawn from FTX due to the platform hacking when the company declared bankruptcy is now being sold.
The person who hacked FTX emerged last week as one of the largest owners of Ethereum in the world, with his holdings of the cryptocurrency “Ethereum” equivalent to 288 million dollars.
Several tech companies following the event announced that funds from FTX were on the “swing”, and some switched from Ethereum to Bitcoin, likely as part of an effort to “reap.”
The need for a regulatory framework
Most experts in the cryptocurrency field agreed that the FTX crisis calls for accelerating the development of a real regulatory framework for cryptocurrencies.
It is only natural that the failures of major corporations with their constant fraud and hacking will raise all kinds of questions about the future of digital assets and the key technology powered by Blockchain.
Cryptocurrency accounts for less than 2% of its assets, Bill Ackman, founder of Pershing Square Capital Management, said on Twitter Monday, adding that overall he remains optimistic about the crypto sector.
Bitcoin traded at around $16,200 today, a number far from the record high it reached in November 2021 at nearly $69,000, while Ethereum was hovering around $1,130.