The contagion effect of the failure of the cryptocurrency exchange platform FTX is visible with the collapse of another cryptocurrency company BlockFi, which was having a spread also called the series of investments of approximately $ 20 billion into BlockFi, hence after FTX now BlockFi company is preparing for bankruptcy this week.
FBI has decided to extradite Sam Bankman from the Bahamas and to evaluate the further links of the issue to the Crypto industry and to investigate this issue further,
How BlockFi company collapsed?
Crypto company BlockFi has resulted in bankruptcy because it was backed by Alameda Research as one of the investors and Alameda Research was the sister company of FTX. With the fall of the FTX platform, all of its subsidiary companies also collapsed. This has resulted in The fall of the cryptocurrency company BlockFi and the company has to freeze its withdrawal request this week and has to file bankruptcy after the FTX company.
A crypto company SALT Blockchain is also on the verge of failure. Although this company was planning to have an agreement with one other company “Bnk to the Future” for the Buying out option. This agreement could not succeed and the company has taken off from its agreement citing the monetary relations of a SALT blockchain company with FTX.
What is the future of the crypto industry after the FTX collapse?
All the crypto companies are able to witness a ripple effect of the FTX platform’s failure. The crypto industry is witnessing a tsunami-like effect after the fall of Terra cryptocurrency this year in May. All these issues have resulted in a trust deficit of all the Crypto enthusiasts and the crypto market has been witnessing multiple withdrawal requests from all the online crypto wallet platforms.
As per some reports, the situation in the Crypto industry seems to be like the financial crisis of 2008 in which the market was shaken by its continuous falling moment and the market witnessed complete trust deficit from retail investors.
The 30-year-old Sam Bankman of FTX is seen as one of the main culprits of the situation who had been claiming the FTX platforms of $20 billion valuation and has been able to raise capital with this valuation from multiple investors and within one year the platform has been collapsed and has to file the bankruptcy.
In monetary terms, this is seen as a ripple effect of the failure of one monetary institution on the other industry to another industry and it will take some time to balance the situation. The founder of Binance Changpeng Zhao has announced a fund in the future to balance out a situation of temporary liquidity crunch, in which this fund will be used for temporary purposes by the Crypto companies.
