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FTX CEO Sam Bankman warns about 3rd tier crypto exchanges

Crypto bear markets are the test of time for companies and projects that exist in the market. Due to the market volatility, many projects and firms go under, taking the investor’s money with them. An excellent example of this is Three Arrows Capital (3AC) which became nearly insolvent because of its massive leverage on Luna. Similar things have happened with other companies like Celsius. For now, companies with exposure to 3AC have managed to survive with the help of the $750 million in credit provided by the FTX CEO. Alongside helping 3AC, Sam Bankman also warns about the 3rd tier crypto exchanges that might act operational but are almost insolvent.

Sam Bankman is capitalizing on the bear markets

The crypto billionaire has made a lot of investments at this point, and most of them have the solid potential of being multi-baggers for Sam. His exchange FTX has acquired a stake in Robinhood. However, Sam also invested in companies to protect investors and help markets stabilize. If 3AC failed, it would impact the cryptomarkets dramatically. However, he warned that there are many 3rd-tier exchanges that are already insolvent. Here’s a tweet from a user trying to withdraw his funds from CoinCRED (a relatively unknown platform) for months. There is a good chance that the exchange is dead, and his funds are lost forever.

Sam said that the popular exchanges like Coinbase, Binance, Huobi, and other top-tier ones have regulatory oversight. But many platforms are also operating in the background and could go under being vulnerable to scammers, attacks, and margin calls. These companies can’t be saved even by Sam because they are “too far gone.” It also means that many users will lose their funds, and no one can change anything.

What should you do as a user?

If you are using popular crypto exchanges like Binance, Coinbase, Huobi, FTX, or other popular ones, then I would say your funds are safe. It’s not a 100% guarantee because the reality is “not your keys, not your coins.” But if you are on one of those shady or lesser-known exchanges, withdraw your funds before it’s too late and shift to a hardware wallet or a better exchange.

What are your thoughts as Sam Bankman warns about 3rd tier crypto exchanges? And what crypto exchange are you using? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.

Also Read: Tether’s CTO says USDT is fully backed mocking short-sellers.



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