A week of turmoil culminating in major crypto exchange FTX filing for bankruptcy has left investors questioning the viability of a sector already bruised by the bitcoin bubble bursting and closures of key market players.
The collapse of several crypto lenders, including Celsius and Voyager, major tokens terraUSD and Luna, and hedge fund Three Arrows Capital, had rung alarm bells even before the blow-up of FTX, headed by Sam Bankman-Fried. Crypto markets have also come under intense pressure this year as rising interest rates prompted investors to ditch riskier assets.
FTX filed U.S. bankruptcy proceedings on Friday and Bankman-Fried stepped down as chief executive officer after a rapid liquidity crunch at the group left FTX scrambling to raise about $9.4 billion from investors and rivals.