Home » Crypto contagion from FTX’s implosion threatens other companies: ‘There are still many more bankruptcies’

Crypto contagion from FTX’s implosion threatens other companies: ‘There are still many more bankruptcies’

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Repercussions from the collapse of Sam Bankman-Fried’s empire continue to spread through financial markets, threatening the future of crypto lenders such as BlockFi and Voyager Digital.

BlockFi said in a blog post on Monday that it has “substantial exposure” to FTX and its affiliated entities. The Wall Street Journal reported that lenders are preparing potential bankruptcy filings.this stopped Last week’s withdrawal over uncertainty regarding FTX.

Company representatives did not respond to requests for comment.

Bankrupt cryptocurrency lender Voyager replacement buyer for its assets after FTX concluded it would not enter into a planned $1.4 billion deal to acquire the company.

Voyager’s chief bankruptcy attorney, Joshua Sussberg, said at a court hearing on Tuesday that he “doesn’t believe the contagion and the fear that is prevalent in the market is over.”

Elsewhere, crypto hedge fund Galois Capital has about $40 million to $50 million in exposure to FTX.important” Fund stuck. And broker Genesis then needed his $140 million injection from its parent company. disclosed $175 million in funds locked into your FTX trading account.

Falling cryptocurrency prices are putting pressure on the over-leveraged miners and hedge funds that lend to the sector. Said Hive Blockchain Technologies Executive Chairman Frank Holmes said: Bitcoin prices have fallen from over $20,000 at the beginning of the month to below $17,000 in recent days.

“We’re still going bankrupt,” Holmes said in a phone interview.

Sussberg told the judge overseeing Voyager’s Chapter 11 case that FTX violated its agreement to acquire Voyager. FTX has agreed to allow Voyager to place other bids, but has yet to confirm that the bankrupt firm will withdraw its deal to acquire a smaller cryptocurrency company, Sussberg said.

“We were shocked, frustrated and disappointed,” Sussberg said at Voyager’s bankruptcy hearing. “There is no deal with FTX. I think it is clear.”

On all issues, long-time cryptocurrency skeptics have repeatedly warned.

“This is part fraud, part delusion,” said Vice Chairman Charlie Munger. Berkshire Hathaway Said CNBCTuesday“A bad combination. I don’t like deception or delusion. And delusion may be more extreme than deception.”

Not all digital asset companies have been so unlucky. Already bankrupt crypto lender Celsius Network, plagued by allegations of mismanagement, had cut its exposure to FTX by 99% before the group’s demise.

Celsius was entangled with FTX totaling $3.6 billion in January, chief restructuring officer Chris Ferraro said at a bankruptcy court hearing on Tuesday. That figure is now approaching $13 million, he said.

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