The storm blowing the cryptocurrency market must continue, according to Changpeng Zhao (CZ), the boss of Binance. “The cryptocurrency industry should experience some contagion from the FTX meltdown in the days and weeks to come,” CZ told our Bloomberg colleagues on Thursday, November 24. “Every time a large players fall, especially a trading platform, there are many other people or institutions that have money on the platform.” So there could be repercussions, he explained, citing the company Genesis Trading. The company had to stop withdrawals, with $175 million locked up in FTX that it currently cannot access. He was on the brink of bankruptcy. And this is not the only one.
In addition to other companies that also have millions blocked such as Galois Capital or BlockFi, companies may be affected by the fall of the former cryptocurrency champion, such as those that ended agreements with FTX. Before the bankruptcy, Sam Bankman-Fried, its founder, completed several deals that are now in limbo. The Voyager company, to be bought by the former number 2, found itself in great difficulty. CZ therefore expects “a few more” companies to be affected – two or three – he said, although overall “the industry is doing well”.
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The businessman also called for more transparency and trust in the sector. Finally, he explained that he was looking to limit the damage done to the cryptocurrency industry by the implosion of FTX – a questionable “savior” position. Because the fall of the former number 2 in cryptos is an event that the trader himself helped to facilitate. Binance initially agreed to buy FTX just as the company began to collapse, before pulling out. In a tweet on Nov. 6, CZ announced it was ending its $530 million stake in FTX, hastening its competitor’s downfall.
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