Cryptocurrency investment-product assets are at a two-year low thanks to the collapse of FTX.
That’s according to a Thursday (Dec. 1) report from Bloomberg, which said the figure fell 15% to $19.6 billion last month compared to November 2021. The report cited both the FTX implosion and a reduction in token prices.
The news comes as the fallout from the FTX crisis continues to spread. This week saw another crypto firm, BlockFi, file for bankruptcy after deciding to pause trading activity on its site.
The company has since sued FTX and is seeking $680 million from Alameda Research, FTX’s sister trading firm, saying Alameda defaulted on collateralized loans.
In its first appearance in bankruptcy court this week, BlockFi said it will collect money it is owed by other crypto firms as it tries to reorganize or find a buyer to pay back the more than $1 billion that it owes creditors.
Meanwhile, FTX founder and ex-CEO Sam Bankman-Fried answered questions this week at the DealBook Summit, despite the advice of his attorneys.
During a question-and-answer session, Bankman-Fried said a few times that he had “screwed up” but stumbled to come up with an answer when asked about criminal liability.
“There’s a time and place for me to think about myself and my own future,” Bankman-Fried said. “I don’t think this is it.”
Several countries have opened criminal investigations into FTX, including Turkey and the Bahamas, where the company is based. But despite this crisis, PYMNTS has argued that FTX “is not, by any means, a direct stand-in for crypto, and it is unfair to paint the entire industry with the scarlet letter of the exchange’s failure.”
And in an interview with PYMNTS Thursday, BitPay Chief Financial Officer Jagruti Solanki pointed to a silver lining.
For example, “a lot of companies will start to do a lot more thoughtful diligence,” he said. “It might slow things down, but the reason is to prevent exactly what’s happening now, and long term, this is good to protect the consumer.”
In addition, Solanki said consumers have grown more knowledgeable about risks.
“They now know what to ask and look for what they need to do on the crypto side,” she said.
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