Many Crypto Exchanges Will Be Bankrupt Said By Billionaire Sam Bankman-Fried. Billionaire and founder of crypto exchange FTX Sam Bankman-Fried revealed the so-called crypto winter is not over and a number of cryptocurrency exchanges have run out of cash. This has made several other crypto companies threatened with bankruptcy.
“There are several third-tier exchanges that have quietly gone bankrupt,” Bankman-Fried told Forbes, quoted from CNBC, Sunday (2/7/2022).
Read Also: Terraform Labs Employees Are Blacklisted From Aviation Service
The 30-year-old’s own wealth has seen a significant decline in 2022 as cryptocurrencies have fallen, but is still at USD 8.1 billion or around IDR 121.81 trillion (assuming an exchange rate of IDR 14,961 per US dollar) according to Bloomberg.
Bankman-Fried’s crypto company FTX has now become the last lender to several crypto companies that are on the verge of bankruptcy. Most recently, FTX is close to agreeing to buy crypto lending company BlockFi for around USD 25 million.
However, Bankman-Fried said there are more crypto companies that are likely to go bankrupt.
“There are companies that are fundamentally too distant and impractical to support them for reasons like a big hole in the balance sheet, regulatory issues or not much business left to save,” Bankman-Fried said.
Read Also: Solana About To Launch Android Phone Integrated With Blockchain
Many Crypto Exchanges Will Be Bankrupt Said By Billionaire Sam Bankman-Fried. Co-billionaire and Dallas Mavericks owner Mark Cuban has previously described crypto’s current decline as similar to the dotcom bubble of the early 2000s, when speculative investments ballooned the valuation of internet-based companies over a 5-year span before falling sharply in 2001 and 2002.
“Crypto is going through the lull that the early internet had. The space is currently stuck in an imitation phase where there are too many companies with too few new utilities. Like Bankman-Fried, he expects more companies to fail,” Cuban said.
Read Also: Blockchain And Crypto Integration by Paypal
Meanwhile, Cuban shares the same view as Bankman-Fried in that there will be many crypto companies that are not strong enough to survive.
Previously, crypto lender Voyager Digital announced on Friday, July 1, 2022, that it had temporarily suspended withdrawals, trading and deposits to its platform. The company also said it was exploring strategic alternatives to maintain the value of its platform.
The move comes days after the company issued a notification to crypto hedge fund company Three Arrows Capital(3AC) over the company’s failure to make required payments on the loan.
Voyager said it had lent USD 350 million or around Rp. 5.2 trillion and 15,250 bitcoin to 3AC and currently according to an informant 3AC has entered the liquidation phase.
Read Also: SEC Investigate Celsius Crypto Lending Platform Case
In a statement, Voyager Chief Executive Stephen Ehrlich said the move gave the company additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the platform.
Voyager said in a release they have hired Moelis & Company and Consello Group as financial advisors, and Kirkland & Ellis LLP as legal counsel to assist the company.
On June 22, Voyager signed an agreement with Alameda Ventures Ltd for a revolving line of credit, gaining access to additional capital to meet its customers’ liquidity needs as crypto prices hit.
Read Also: Can Do Kwon Be Punished For The Collapse Of Luna?
In a release, New Jersey-based Voyager said the value of its crypto assets is $685 million, compared to more than $1.12 billion in crypto assets it has lent.
The move by Voyager comes less than a month after another crypto lender, Celsius Network suspended withdrawals, citing extreme market conditions. Celsius has not yet opened a recall for its customers.
Previously, a cryptocurrency market correction had wiped out millions of dollars in funds stolen by North Korean hackers, four digital investigators said. This they say threatens the main source of funding for sanctions-hit North Korea and its weapons program.
Reporting from Channel News Asia, Saturday (2/7/2022), North Korea is alleged to have devoted resources to stealing cryptocurrencies in recent years, making it a strong hacking threat and leading to one of the largest cryptocurrency thefts on record in March, where nearly USD 615 million or about Rp 91, trillion stolen, according to the US Treasury.
Read Also: Mastercard Registers Patents For 15 Trademarks Related To Metaverse
Two South Korean government sources who declined to be named due to the sensitivity of the issue said the sudden decline in the value of cryptocurrencies, which began in May amid a broader economic slowdown, complicates Pyongyang’s ability to cash in on cryptocurrencies.
This condition affects how North Korea plans to fund its weapons program.
It comes as North Korea tests a record number of missiles that the Korea Institute of Defense Analysis in Seoul estimates have cost as much as $620 million so far this year and prepares to resume nuclear tests amid the economic crisis.
North Korea’s long-standing, unwashed crypto holdings have been monitored by New York-based blockchain analytics firm Chainalysis, which covered funds stolen in 49 hacks from 2017 to 2021. All of them have declined in value from $170 million to $65 million since the start of the year.
Read Also: Reason Behind Freezing Withdrawals And Drops 70 Percent Of Celsius Token
One of North Korea’s cryptocurrency caches from the 2021 heist, which is worth tens of millions of dollars, has lost 80 percent to 85 percent of its value in recent weeks and is now worth less than $10 million, said Nick Carlsen, an analyst with TRM Labs, a blockchain analytics firm. others based in the US.
Many Crypto Exchanges Will Be Bankrupt Said By Billionaire Sam Bankman-Fried. A person who answered the phone at the North Korean embassy in London said he could not comment on the crash because allegations of cryptocurrency hacking were “totally fake news.”
“We didn’t do anything,” said the man who described himself only as an embassy diplomat. North Korea’s foreign ministry calls such accusations US propaganda.
Last March’s $615 million attack on blockchain project Ronin, which powers the popular online game Axie Infinity, was the work of a North Korean hacking operation dubbed Lazarus Group, US authorities said.
