The bear market in cryptocurrencies is still raging. FTX seems to start a complete chain reaction in which other companies are swept up. Crypto exchanges are also vulnerable, but if you are lucky you can get your tokens from these platforms. According to the American bank JPMorgan, this is happening on a large scale.
Exchanges are emptying
In a statement to investors, the world’s largest investment bank emphasizes that all major exchanges are experiencing outflows, writes TheCrypt. But with Gemini, OKX and Crypto.com this happens the most. This will be caused by people’s fear that these trading platforms will suffer the same fate as FTX. This platform went bankrupt last week, after which customers were no longer able to withdraw their tokens.
We know from Crypto.com that it might have a somewhat questionable balance sheet. About 20% of the company’s reserves are said to consist of Shiba Inu (SHIB)., although this would be because users’ assets are kept 1-to-1 in the exchange’s reserves. In addition, the exchange would have made a ‘wrong transaction’ in which no less than $ 400 million in ETH was sent to another crypto exchange. All in all, there are some strange things going on at Crypto..com that are apparently causing customers to withdraw their funds.
Infections of other crypto companies possible
Investors therefore prefer to have their coins in, for example, a hardware wallet, where you own your private keys and therefore your tokens. You are not on an exchange. Often the exchange is the legal owner. If the platform goes bankrupt, customers often only get part of their money back, because investors and creditors have priority.
Such a bankruptcy is actually not that exceptional. After the problems at FTX, several companies have already run into problems, including Genesis and Gemini. BlockFi is a third party affected. One bankruptcy can ‘infect’ other companies if they are also not financially strong enough.