If you are an investor in crypto, you surely trust digital currencies and all the technology that supports them, and you are right. But you will also be aware that you are facing certain risks, above all, coming from a new market and that, in a certain way, it is still experimenting.
This occurs with the platforms that guard these digital assets, which from one day to the next can, for whatever reason, go bankrupt and even disappear. One of the cases that has been making headlines in recent days has been precisely that of FTX, which was one of the crypto brokers with the largest number of users worldwide – at the beginning of this year it had more than 5 million among all its subsidiaries-
Faced with this, you may wonder what really happens if the exchange where I have invested my cryptocurrencies goes bankrupt. Since Roamsa digital platform specialized in financial advice, tell us the key points that you must take into account in situations of this type, in this article.
FTX declared bankruptcy last Friday and filed for Chapter 11 of the US Bankruptcy Law, which according to the BBC, “It is a kind of pardon or commutation of sentence. Prevent the company from dismembering, going into immediate liquidation and starting to lay off staff. In exchange, the law allows the company to continue its operations and reorganize its structure free from the pressure of its creditors, while it negotiates a payment plan for its debts.
Why has FTX come to this situation?
As indicated by Roams, they are mainly for three reasons:
- By a high investment in the purchase of other platforms to ensure his dominance in the market – some of which he bought even when they were practically bankrupt.
- By a liquidity Crisis, since he had collateralized loans in FTT (his own cryptocurrency) and when the price of his crypto fell, he had to put more money in to secure those loans.
- For the bankruptcy rumors which initially broke out in the wake of the announcement. This situation made a good part of the clients want to withdraw their cryptocurrencies and, as a consequence, there was no money for everyone.
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