a cryptocurrency platform failure pollutes the entire industry

The fall of the giant FTX causes a real domino effect in the world of cryptocurrencies. Victims of the bankruptcy of the world’s number one cryptocurrency exchange, the consequences of which continue to spread, several platforms have had to suspend certain withdrawals in recent days.

French Coinhouse, which recently confirmed to Agence France-Presse (AFP) on Thursday, November 16, that it has blocked exits on its crypto ledger, was presented as a cryptocurrency savings product. In a series of tweetsthe platform explained that some of its lending partner sites have stopped withdrawing funds for their customers.

Coinhouse’s partners included Genesis. The latter entrusted cryptocurrencies to Alameda, a kind of speculative arm of FTX, which went bankrupt last Friday. Coinhouse noted “global tensions and pressure on liquidity in the crypto market”.

A “difficult” sequence for the industry

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Same story on the Gemini side, the platform of the Winklevoss brothers made famous by the birth of Facebook and the movie The social network. Also trapped by the failure of the creation, the group had to freeze the program Gemini Earn, which allows you to invest in its cryptocurrencies, and then lent it to others for a reward. “The past week has been an incredibly difficult and stressful time for our industry”, described Gemini on Twitter. According to CoinDesk, before turning off the faucet, Gemini had withdrawn nearly $600 million in just twenty-four hours against less than $100 million in deposits, a serious imbalance due to the nervousness of users who feared infection.

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Another big player, BlockFi, froze its entire platform in late June, which manages about $3.9 billion spread across more than 650,000 accounts. “We have significant exposure to FTX”A number of American media outlets have recognized BlockFi, which has reported that it is considering filing for bankruptcy.

to understand the contagion

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“It’s very worrying because we haven’t seen the extent of the contagion yet.”, comments Francesco Melpignano, general manager of Kadena Eco, specializes in blockchain (a registry that lists all the transactions of a platform). For him, the FTX earthquake and its aftershocks are bigger than those created in the spring by the explosion of digital currency Terra, which brought down several exchange sites, notably the Celsi show. He even compares the failure of FTX to the failure of Lehman Brothers, which caused panic in the markets and dragged down several banks in the fall.

In a video interview The Wall Street Journalthe CFO of Coinbase, one of the giants of the sector, estimated that the entire crypto system is not in danger. “But it will take a few days or a few weeks to understand the contagion of this event and to understand who has been exposed.”Alesia Haas explained.

If anxiety continues in the world of cryptocurrencies, the past week will, on the contrary, demonstrate how hermetic the traditional financial markets are to the difficulties of digital currencies.

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The world with AFP

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