By now, the FTX saga has become arguably the biggest event in the crypto industry since the Mt. Gox hack. It is being compared to cryptocurrency’s Lehman Brothers moment, and on the same magnitude of Enron or Bernie Madoff in terms of how deep the scandal goes.
The contagion might even be worse than any of those events, with the FTX domino effect also taking down BlockFi, Genesis, and starting to affect the Winklevoss-owned Gemini. With so few major players left the space, where can crypto investors and traders go to trade safely and avoid exposure to FTX?
FTX Contagion In A Nutshell
It all started with a report on FTX’s balance sheet, showing that the company’s assets were made up of useless tokens that the company itself created. Documents had shown that through an FTX sister company, customer funds were being used to trade and they were using their own illiquid token as collateral.
A top FTX competitor and fierce adversary, Binance, took the moment of weakness as an opportunity to strike. Binance’s CEO announced the liquidation of FTT tokens, which prompted a bank run on FTX. FTX was forced to pause user withdrawals and in a twist of fate, engage with Binance for a possible bailout.
Ultimately, Binance passed on pushing the distressed assets, and FTX is instead filing for Chapter 11 bankruptcy and being investigated by the SEC, CFTC, and DOJ. The situation has uncovered unusual ties to everything from Ukraine, to the Joe Biden presidential campaign.
Because FTX was a supplier to many other company’s lending programs or provided backing to others, a domino effect spread across the industry that might not yet have finished falling. The contagion has already spread to brands like BlockFi, Gemini, Genesis, and many more.
Is Binance A Ticking Time Bomb?
In light of the FTX situation, the entire world is talking about the collapse of the cryptocurrency platform. New York University economics professor Nouriel “Dr. Doom” Roubini has often slammed cryptocurrencies, but in his latest tirade he has targeted Binance CEO Changpeng “CZ” Zhao.
“What are the seven Cs of crypto? Concealed, corrupt, crooks, criminals, con men, carnival barkers and finally CZ,” said Roubini. “He’s banned in the U.K., he’s under investigation by the U.S. justice department for money laundering, $8 billion from Iran,” Roubini elaborated.
Roubini boldly calls CZ “a walking time bomb” and claims he is going to be “worse than Sam Bankman-Fried.” Sam Bankman-Fried is the FTX CEO, once hailed as the next Warren Buffett and worth billions.
Although FTX was large, Binance is even bigger. It has the most trading volume out of any other cryptocurrency exchange and is one of the most recognizable brands associated with crypto. But Binance was at the center of the FTX situation who lit the fuse of a bomb just waiting to go off. Is Binance the next platform to possibly blow up?
Where To Turn For A Trusted Crypto Trading Platform?
With trust the most important factor when picking any cryptocurrency trading platform, it is necessary to search for a reliable platform with a clean reputation, has never been involved in a scandal or a hack, and has several awards to verify trustworthiness. There aren’t many platforms that check all of these critical boxes, besides PrimeXBT.
PrimeXBT is cryptocurrency-based margin trading platform offering access to crypto, stock indices, commodities, and forex currencies via a single trading account. Because the platform has roots in traditional finance, strict compliance guidelines are followed ensuring a safe experience for all users. PrimeXBT also works with the licensed and regulated Covesting team, who develop the platform’s exclusive copy trading module.
PrimeXBT trading tools are also important for limiting exposure to trading platforms. By using cryptocurrencies as collateral to trade with long and short positions with up to 200x leverage, much larger positions sizes are possible with less capital, meaning less assets overall must be deposited for the same buying power or profit impact.
Most importantly, PrimeXBT was recently awarded the Most Trusted Crypto-Asset Trading Platform by Crypto Expo Dubai 2022. If you are looking for a new trading platform to trust and call home, turn to the always-reliable experience at PrimeXBT.