$1B to $2B of FTX Customer Funds Disappear
November 14, 2022
After cryptocurrency exchange FTX filed for bankruptcy, between $1 billion to $2
billion of customer funds have vanished from the failed crypto exchange.
Bankman-Fried, now the ex-CEO of FTX, transferred $10 billion of customer funds
from his crypto exchange to the digital asset trading house, Alameda Research.
Suneet Muru, Analyst in the Thematic Intelligence Team at GlobalData, a leading
data and analytics company, offers his view:
“FTX is the crypto industry’s latest sacrificial lamb. When Binance CEO
Changpeng Zhao speaks, the industry listens, and this time he has exposed FTX’s
bankruptcy will be a classic example of ‘short-term pain, long-term gain’. It
will deflate the crypto market cap over the next few months, but will force
exchanges to realign their business models toward effective risk management. Now
more than ever, exchanges must demonstrate how they differ from banks and keep
far less of their own cryptocurrencies on their books.
“These same exchanges must also continue diversifying their revenue streams away
from transaction fees and towards subscription-based products to limit exposure
to market downturns.
“Most investors will sell their crypto holdings as their preferred tokens are
hemorrhaging value. The sooner the industry realizes that FTX token is just one
of many cryptocurrencies, the sooner it can get back to pushing the pace of
adoption amidst imminent regulation.”