Bankruptcy of the FTX exchange: a sign of a systemic crisis for cryptocurrencies?
Phone screen displaying the logo of FTX, the cryptocurrency exchange platform.
AFP - OLIVIER DOULIERY
Text by: RFI Follow
3 mins
The debacle of FTX, one of the main cryptocurrency exchanges, could lead to losses of tens of billions of dollars for customers of this “exchange”.
The company is bankrupt, its founder, US billionaire Sam Bankman-Fried has resigned and the assets are blocked - although it appears that suspicious movements of at least $1 billion have occurred in recent hours, according to the Reuters agency.
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This Friday, November 11, the American company FTX, one of the largest cryptocurrency exchanges
housed
in the Bahamas, declared bankruptcy.
Its founder, the young American billionaire Sam Bankman-Fried resigned.
In turmoil for a week, FTX drags in its fall about 130 companies that worked with it.
It is not yet known whether savers who had accounts with FTX will be able to recover their assets.
Losses could run into billions of dollars.
From Lagos to San Francisco, from Paris to Nairobi, this bankruptcy is causing cryptocurrency owners to tremble.
Bitcoin, already battered for almost a year, lost almost a quarter of its value in a few hours following the bankruptcy of FTX.
Risk of crisis of confidence among savers
The crisis is first of all a crisis of confidence which risks chilling savers who speculated on cryptocurrencies.
For David Nataf, president of the AFRO foundation, a pan-African cryptocurrency, consumers must now choose the vehicles in which they invest more seriously.
There are over eight thousand cryptocurrencies, and not all of them are created equal.
"
The currencies that will survive will probably be the
'cause' currencies," he explains.
A cause like pan-Africanism, a cause like the carat for diamond dealers.
We will also try to find currencies to be able to collateralise the raw materials.
In commodity trading, it is not normal to have to store a quantity of gold before delivery.
So “cause” currencies will be able to survive and purely speculative currencies will tend to disappear.
»
As for exchanges, the FTX debacle demonstrated that they needed to be monitored more.
Giants like Binance, which controls 40% of transactions, or Coinbase, one of its challengers, swear hand on heart that their practices are healthier than that of FTX and that their clients' assets are not at risk.
The descent into hell continues for FTX
The descent into hell is not over for FTX and its leaders.
Not only did its resigning founder Sam Bankman-Fried see his personal fortune drop in a few hours from 16 billion dollars to zero.
But his company FTX is now insolvent and it risks becoming toxic to the entire industry.
The doubts about the quality of its management expressed a week ago by its competitor Binance take on all the more relief as last night FTX spotted a series of unauthorized movements.
Funds theoretically frozen by the bankruptcy procedure have disappeared.
According to Reuters, at least a billion dollars drawn from customer deposits are concerned.
FTX does not confirm the amounts, but announces that it has secured its funds offline to protect them.
Hacking or manipulation?
The rumors are rife.
The FTX debacle is dealing a major blow to the cryptocurrency industry.
The FTX case will also give arguments to monetary authorities around the world who have been trying for a few years to better regulate the sector.
The monetary Wild West definitely no longer inspires confidence.
►Also listen: Cryptocurrencies and digital currencies: States regain control
Cryptocurrencies, a poorly regulated sector
Cryptocurrency is freedom.
This is the slogan that we have most often heard from the mouths of their promoters.
They were born in the aftermath of the 2008 financial crisis as a reaction to the traditional financial system which, through its inconsequence, had plunged the world into turmoil.
But from freedom to anarchy, the border is sometimes blurred, and the multiple crises that the sector has experienced since it has been brewing trillions of dollars demonstrate that a form of regulation has become necessary.
However, the major central banks tend to confuse regulation with witch hunts.
What pushes the companies of purchase and sale, the exchanges, to expatriate as did FTX in the tax havens like the Bahamas.
"
We need clear legislation and not punitive legislation.
However, we are in the ex-nihilo punishment.
There is a bad reputation (editor’s note of cryptocurrencies).
Right off the bat, there's a hint of opacity.
From there, we have exchanges that will settle in opaque jurisdictions.
It is because there is no jurisdiction which today has put in place clear legislation adapted to this new matter
, ”said David Nataf, president of the AFRO foundation, a pan-African cryptocurrency.
Contrary to popular belief, the cryptocurrency industry is not averse to regulation.
But it is struggling to emerge in the United States and Europe.
China, on the other hand,
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