© Reuters
By Geoffrey Smith
Investing.com — Cryptocurrency prices weakened again on Monday as fears over the safety of deposits, following the crash of the FTX exchange, continued to drive withdrawals and leaks to the relative safety of the market. Fiat money.
As of 10:14 ET (15:14 GMT), Bitcoin was down 2.5% at $16,141, after plunging below $16,000 amid a general loss of confidence in the crypto space. The, meanwhile, was trading down 3.2% at $1,138. Altcoins, which have suffered from a sharp drop in liquidity since the loss of market-making activity by FTX-affiliated hedge fund Alameda Research, generally fell further, down 6.7% and down down 7.1%.
The market capitalization of the world’s largest stablecoins () – a rough indicator of net flows into and out of the crypto space – fell to its lowest level in three months, at $65.8 billion.
Overnight, further evidence emerged of the complete loss of governance and risk control at FTX, with some of the funds withdrawn from FTX accounts by a mysterious exploiter being moved to other blockchains for the purpose. to put them out of reach of the people administering the defunct empire of Sam Bankman-Fried.
According to blockchain analysis by Arkham Intelligence, the hacker transferred 15,000 Ether – worth some $17 million – to renBTC, an Ethereum blockchain token that can be exchanged for Bitcoin. Observers noted that a number of developers behind the REN network joined Alameda in 2021, and the move bolstered suspicions that the exploiter was a former company insider.
The amount transferred on Sunday was just a fraction of the total sum – equivalent to more than $600 million – that disappeared from FTX-affiliated wallets within two days of the company filing for bankruptcy in the States. -United. Arkham analysts noted that “the attacker is limited by the liquidity of renBTC and therefore cannot transfer a lot of money at once”.
FTX had more than a million creditors – including depositors – at the time of its collapse, and early filings in its bankruptcy proceedings indicated that its administrators face a gargantuan task to get them back on their feet. . New CEO John J. Ray said in his ‘day one’ statement that he got less than $1 billion in assets, while estimates for his liabilities are $10 billion. or more.
While FTX and Alameda seem to have lost most of their money on altcoins, fear of contagion has reached even the most established digital currencies, reflecting the inability, or unwillingness, of some of the biggest names in the game. sector to provide proof of their assets.
Grayscale Bitcoin Trust (GBTC), the world’s largest exchange-traded fund, last week declined to release a “proof of reserves” crypto statement, citing “security concerns.” The market reacted by applying a bigger than ever discount – more than 40% – to the assets that Grayscale claims to hold not only in its Bitcoin fund, but also in its Ethereum fund.
Grayscale claims to hold approximately 635,000 bitcoins in its fund, worth more than $10 billion. Any runs on the fund comparable to previous runs seen this year on tokens such as the stablecoin Terra/Luna or FTX’s native FTT token would likely result in steep declines for the world’s largest digital asset.