The fallout from the collapse of FTX by Sam Bankman-Fried The empire rattled digital assets for a second week, putting notable pressure on the sol token, which is down 19% for the week, and Silvergate, a commercial bank specializing in cryptocurrency-related services, down more than 25%.
Since last Friday, when FTX and more than 100 affiliates filed for bankruptcy, cryptocurrencies have lost another $42 billion in market value.
Among the most depressed is sol, the token of the Solana
FTX was known to be a big investor in floor. Infamous Bankman-Fried Told a crypto trader during a Twitter debate on January 9, 2021 about whether the token was overvalued: “I will buy as much SOL as you have, right now, at $3. Sell me anything you want. So fuck off.” The token was trading between $2.94 and $3.66 that day, according to yahoo. The Financial Times reported that he saw a balance sheet showing that FTX held $982 million in ground on November 10.
Meanwhile, Serum, the cryptocurrency of the Solana-based decentralized exchange Serum that Bankman-Fried helped create, is hovering around 2 cents, down about 37% for the week, according to nomics. . FTT, the FTX exchange token, fell around 44% to $1.44.
Shares of Silvergate Capital, one of the crypto banks used by FTX and its affiliated entities, fell almost 11% on the day. Crypto-focused publication The Block reported Friday that FalconX, one of the largest prime brokers in the industry, will no longer use the Silvergate Exchange Network (SEN), according to a company’s email sent to clients. On November 11, Alan Lane, CEO of Silvergate, published a statement claiming that the bank’s relationship with the struggling stock exchange was limited to deposits. The bank also said that FTX deposits accounted for less than 10% of the $11.9 billion in funds received from all digital asset customers.
Coinbase’s stock lost seven% Friday after Bank of America
Also in turmoil, the lending arm of crypto finance firm Genesis suspended new lending and repayments on Wednesday. Analytics firm Nansen said on Thursday that blockchain data suggests that Genesis could have been a key lender for Alameda, the hedge fund subsidiary of FTX. According to a Wall Street Journal reportGenesis was seeking a $1 billion emergency loan from investors before telling clients it was suspending redemptions.
Gemini, the crypto exchange owned by the Winklevoss brothers, subsequently frozen withdrawals on its return-generating Earn program since Genesis was its lending partner.
Crypto lender BlockFi, bailed out by FTX in July, also suspended its client withdrawals, and consider next steps. The company denied that the majority of its assets were held by FTX, but said it had heavy exposure to the stock exchange and Alameda.
Exodus from centralized exchanges
Investors withdrew more than $1 billion worth of bitcoins from centralized exchanges this week, according to Coinglass data, a cryptanalytic platform. Crypto owners are apparently moving to take custody of their assets rather than leaving them with exchanges.
Research firm Kaiko said volume on decentralized exchange Uniswap V3 outpaced many of its centralized peers following the collapse of FTX, gaining 13% market share.
Additionally, hardware wallet makers Ledger and Trezor reported significant spikes in device sales last week.
At the moment, “it is difficult to estimate what the impact of FTX’s collapse will be,” says Ki Young Ju, CEO of crypto analytics platform CryptoQuant. “The biggest problem with this situation is that we are losing people’s trust.”