Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Investing

Regulators circle FTX as rival exchanges try to calm investors

Published : , on

By Vidya Ranganathan and Alun John

NEW YORK (Reuters) -Bitcoin and other cryptocurrencies were under pressure on Monday following last week’s spectacular collapse of crypto exchange FTX, while rival exchanges sought to reassure jittery investors of their own stability.

Kris Marszalek, chief executive of Singapore-based crypto exchange Crypto.com, rebutted suggestions it was in trouble, saying in a YouTube livestream that the platform would prove all naysayers wrong.

The “AMA (ask-me-anything)” session came after investors took to Twitter over the weekend to question a transfer of $400 million worth of ether tokens to the Gate.io exchange on Oct. 21.

Marszalek tweeted on Sunday that the ether was recovered and returned to the exchange, but the Wall Street Journal reported withdrawals at Crypto.com rose over the weekend.

An audited proof of the exchange’s reserves will be published within weeks, Marszalek said on Monday. The exchange did not engage in any “irresponsible lending products,” he added.

A Crypto.com spokesperson did not respond to a request for comment on whether the platform’s outflows continued on Monday.

Crypto.com is among the top 10 such exchanges by turnover globally, but smaller than FTX and market leader Binance. It made headlines in 2021 by signing a $700 million deal to rename the Staples Center in Los Angeles as the Crypto.com Arena, and getting actor Matt Damon to promote the platform.

FTX filed for bankruptcy on Friday in one of the highest-profile crypto blowups after frenzied traders withdrew $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

The crypto exchange’s collapse is being probed by multiple authorities, including U.S. prosecutors in Manhattan, a source with knowledge of the investigations said on Monday.

LedgerX LLC, an FTX subsidiary, on Monday formally withdrew its request from last December with the U.S. Commodity Futures Trading Commission to allow it to offer products that are not fully collateralized.

FTX was engulfed in more chaos on Saturday after saying it had detected unauthorized access and analysts said hundreds of millions of dollars of assets had been moved from the platform in “suspicious circumstances.”

New FTX Chief Executive John Ray said on Saturday the company was working with law enforcement and regulators to mitigate the problem, and was making “every effort” to secure assets. Former CEO and FTX founder Sam Bankman-Fried previously told Reuters some of the transfers out of FTX were a result of “confusing internal labeling.”

Another crypto exchange, Kraken, said on Twitter on Sunday that it froze the accounts of FTX, affiliated crypto trading firm Alameda Research, and their executives.

“We have actively monitored recent developments with the FTX estate, are in contact with law enforcement, and have frozen Kraken account access to certain funds we suspect to be associated with ‘fraud, negligence or misconduct’ related to FTX,” a Kraken spokesperson said.

Bitcoin slid back below $16,000 early on Monday before recovering to trade at $16,574, up 1.62% at 11 a.m. EST (1600 GMT). Still, down 18% so far in November, bitcoin is set for its biggest monthly percentage fall since June when the fallout from the failure of stablecoin TerraUSD roiled markets.

FTX’s token was worth just $1.3, down 94% in November, while Crypto.com’s Cronos token has halved in the past week to $0.06, according to price site Coingecko.

INVESTOR NERVES

FTX’s collapse has left investors nervous amid unverified rumors, even as exchanges publish details of their reserves and promise further disclosures.

“One of the theories floating around is that the exchanges are moving crypto around to shore up their balances and make everything look good even when it’s anything but,” said Zennon Kapron, founder of fintech consultancy Kapronasia.

“It’s like someone showing someone a bank statement that you had $100 in your account at 2pm this afternoon. At 1pm it might have been $1 and someone just transferred you $99, and at 4pm, you’re going to send it back. … A snapshot tells us very little about the actual health of an exchange.”

Separately, smaller, Asia-based exchange AAX halted withdrawals over the weekend, citing failures at an unnamed third-party partner during a scheduled-system update.

AAX said it hoped to resume regular operations in seven to 10 days, but in a note to customers said: “In light of the insolvency of one of our industry’s largest players last week, crypto users are rightfully concerned about the operational and financial stability of centralized digital asset exchanges”.

Changpeng Zhao, CEO of Binance, the world’s largest crypto exchange, said he would look to create an industry recovery fund to help projects that were “otherwise strong but in a liquidity crisis.”

Binance last week signed a nonbinding letter of intent to buy FTX’s non-U.S. assets but later abandoned the deal, precipitating its bankruptcy.

Zhao has since warned of a “cascading” crypto crisis.

Meanwhile regulators continued to circle FTX, which had itself been a white-knight investor for failing crypto projects last summer.

The Bahamas securities regulator and financial investigators are investigating potential misconduct over FTX’s collapse, the Royal Bahamas Police Force said on Sunday.

Visa Inc, the world’s largest payments processor, said on Sunday it was severing its global credit card agreements with FTX.

(Reporting by John McCrank in New York, Vidya Ranganathan in Singapore and Alun John in London; Additional reporting by Xinghui Kok in Singapore and Elizabeth Howcroft in London; Editing by Sam Holmes, Kirsten Donovan and Jonathan Oatis)

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post