The bankruptcy of digital asset lending/custodial platform BlockFi is the latest casualty of the FTX exchange’s collapse, while FTX’s founder continues his carefree existence in his alternative reality.
The FTX exchange may have filed for bankruptcy protection but there’s no real defense against the sector-wide carnage this scandal has unleashed.
The states, among them California, Oklahoma, and New York, ordered Nexo to halt its interest-earning product, which they claim is an unregistered security.
The risks of investing in the digital currency industry remain high as Fed continues to tighten its policies to counter inflation, while fear spreads among potential investors caused by manipulative platforms.
Gensler’s message for digital currency businesses was that although their platforms and services revolve around distributed ledger technology does not mean that existing securities laws do not apply.
The collapsing digital asset lender Vauld applied for a six-month moratorium, but the Singaporean judge ruled that this would impact supervision and monitoring.
The regulator revealed its investigations have already found that BlockFi and Voyager have been offering unregistered securities and is going after others.
The conditions are ripe for a long ‘crypto winter’ from which many coins will never recover, and as we can all see, it’s a multi-faceted problem with no easy solutions in sight.
Digital asset hedge fund Three Arrows Capital, which had been around since 2012, now appears to be dragging other industry names into its whirlpool.
The best way to prepare for the further decline in the digital asset markets is to manage risk. Selling is good too, especially if you know that you can buy back at a lower price in the future.
After claiming that they had properly managed risk and that no client funds were impacted, SBF announced that FTX was "injecting $250m into BlockFi and partnering with them."