Bankman-Fried took to Twitter on Wednesday to inform his followers that “there was too much leverage—more than I realized” in his business. This came barely hours after he stated that FTX US had sufficient funds to reimburse customers.
The crisis’s aftermath jeopardizes the future of crypto lenders such as BlockFi Inc. and Voyager Digital Ltd. A BIS study found that roughly 75% of retail Bitcoin buyers lost money. In a welcome reprieve from recent volatility, crypto markets remained stable, with Bitcoin hovering around $17,000.
According to the Bank for International Settlements (BIS), a study of how retail investors use cryptocurrency exchange apps discovered that roughly three-quarters had lost money on Bitcoin.
According to the BIS working paper, the vast majority of app downloads occurred when Bitcoin’s price was above $20,000, spanning 95 countries from 2015 to 2022.
Bitcoin, the world’s largest cryptocurrency, has fallen more than 70% from its all-time high, weighed down by rapidly tightening monetary policy and a string of massive blowups at crypto firms, most recently FTX.
According to a filing on the court’s website, FTX Digital Markets Ltd. of the Bahamas has filed a Chapter 15 petition for recognition of a foreign proceeding in the Southern District of New York. It is a subsidiary of FTX Trading Ltd., which declared bankruptcy on November 11.
Singapore has stated that it will continue to focus on productive blockchain applications. When asked at a conference if the FTX scandal has changed the Monetary Authority of Singapore’s approach to crypto, Sopnendu Mohanty, its Chief Fintech Officer, said, “We stay on course. We stay on the business-case driven approach to space.”
He added that the central bank is “willing to innovate” as long as risks are managed. Singapore, which is cracking down on retail cryptocurrency speculation, has previously stated that it aspires to become a hub for productive applications of blockchain technology.
The license of FTX Australia has also been suspended. Following its voluntary administration on November 11, the Australian Securities and Investments Commission suspended FTX Australia’s Australian financial services license until May 15, 2023.
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