• FTX’s collapse was earth-shattering and big money investors are unlikely to come into the crypto sector until better regulation is in place.
• More Crypto Companies Could Go Bankrupt In FTX’s Wake, such as Genesis Global Capital, a subsidiary of Barry Silbert’s crypto empire Digital Currency Group.
• FTX Could Be The Beginning Of The End For Crypto if better regulation is not put in place.
The failure of FTX has sent shockwaves through the crypto community. With over $3.1 billion owed to its top 50 creditors, many investors and companies have had to face the reality that their investments in the exchange may never be recovered. This collapse has caused a ripple effect of losses for smaller ancillary companies and investors, with the most notable being Genesis Global Capital, a subsidiary of Barry Silbert’s crypto empire Digital Currency Group.
Genesis Global had $175 million worth of funds on FTX, and due to the collapse, Digital Currency Group had to infuse its subsidiary with $140 million in emergency equity to cover the losses. This move has only served to spook the crypto markets further, and has caused many investors to be hesitant to invest in the crypto sector.
The lack of regulation and transparency in the crypto sector has been a major concern for many investors. Without a clear framework in place, investors can never be certain that their funds are safe and secure. Despite the potential for huge profits, the lack of regulation and security makes it difficult for investors to trust the crypto market.
FTX’s collapse could be the beginning of the end for crypto if better regulation is not put in place. Without a clear framework in place, the crypto sector will not be able to attract big money investors, and instead, be limited to those willing to take on high risk investments.
In order for crypto to move forward and become a legitimate investment option, better regulation needs to be put in place. This means that exchanges need to be more transparent and secure, and investors need to be sure that their funds are safe. Once these measures are taken, then the crypto sector may begin to recover from the FTX collapse and start to attract more investors.