November 18, 2022, 11:56 AM
November 18, 2022, 11:56 AM
Several cryptocurrency platforms have suspended withdrawals in recent days, victims of the bankruptcy of its competitor FTXwhose ramifications continue to spread.
The last to take action on Thursday was the French Coinhousewhich confirmed to AFP that it had blocked withdrawals from its cryptocurrency savings product.
In a series of tweets, the platform explained that some partner sites to which it lent funds they also stopped withdrawals from their customers.
It is a domino effect that affects the entire sector, since Coinhouse associates include, for example, Genesis, which delivered cryptocurrencies to Alameda, a fund of FTX, the firm that was placed under the protection of US bankruptcy law. a week ago.
Coinhouse reported on “global tensions in the crypto market and a pressure on liquidity.”
Gemini, flagship of the Winklevoss brotherspopular for the genesis of Facebook and the film “The Social Network” (“The Social Network”) is in a similar position.
The group, also affected by the difficulties of Genesis, had to freeze its Gemini Earn program, which allows placing cryptocurrencies in credits to third parties to obtain profits.
“This past week marked a difficult and stressful sequence for our industry,” Gemini described on Twitter.
According to the CoinDesk site, before turning off the tap Gemini registered in just 24 hours withdrawals for about 600 million dollars, against deposits of less than 100 million, a serious imbalance resulting from the nervousness of users, who fear contagion throughout the sector.
BlockFianother major player in the crypto universe, suspended withdrawals from its entire platform, which at the end of June managed some 3.9 billion dollars in more than 650,000 accounts.
“We have significant exposure to FTX,” BlockFi acknowledged. Several American media indicated that this firm could also go bankrupt.
“It is very disturbing, because we have not yet seen the extent of the contagion,” summarized Francesco Melpignano, general director of Kadena Eco, specialized in blockchain, the system that allows all transactions on a platform to be recorded.
to Melpignanothe FTX earthquake and its aftershocks surpasses the one that was created a few months ago by the implosion of the digital currency Terra, which dragged several exchange sites into the abyss, in particular Celsius.
This specialist compares the bankruptcy of FTX with the fall of Lehman Brothers, which sowed panic in the stock markets and infected other banks.
In an interview with The Wall Street Journal, the financial director of Coinbase, one of the giants in the cryptocurrency sector, considered that the business as a whole is not in danger.
“But it will take several days or weeks to measure the contagion that caused this event and understand who was exposed,” explained Alesia Haas.
“Crypto will recover”
Some argue that FTX’s situation is comparable to that of Terra because they are platforms with models that resemble traditional financial companies.
“They took advantage of blockchain technology to create models that were not viable, with the goal of getting rich,” said Daniel Keller, co-founder of Flux, a virtual ecosystem that has its own cryptocurrency.
For him, the future of the sector is based on “decentralization”, which would make it possible to avoid intermediaries.
Melpignano precisely points out that the platforms with this type of model “resisted this collapse” after the bankruptcy of FTX, and also the previous crises.
“I think crypto will recover,” said Sylvia Jablonski of Defiance ETFs, one of whose investment funds is invested in cryptocurrencies. “There are so many possible uses for the blockchain. (…) It’s too big a system to go away,” she said.
Although the crypto industry was affected, what happened with FTX shows, on the other hand, to what extent traditional financial markets are hermetic to the fluctuations of virtual currencies.
“Some actions (of firms in the sector) were affected. (…) But that does not compromise the stability of the financial system,” said Jablonski, for whom the crisis shows that investors prefer regulated markets, in the face of an unsupervised cryptocurrency industry.
