Crypto Contagion?
Once again, crypto markets are sinking, losing over 10% in the past 24 hours, as the collapse of FTX has revealed an Emperor with no clothing. In aggregate, crypto assets now sit around $800 million, far off its all-time high of $3 trillion (according to Coinmarketcap).
It was recently reported that Binance has decided not to acquire FTX after a review of its books, questioning the mishandling of customer funds.
This has caused some firms to issue statements regarding possible exposure to FTX.
Tether, the largest dollar-based stablecoin by market cap, has issued a statement claiming they have “absolutely no credit towards FTX or Alameda Research. Tether is completely unexposed to Alameda Research or FTX.”
Tether continued:
“Tether tokens are 100% backed by our reserves, and the assets that are backing the reserves exceed the liabilities. Tether holds a strong, conservative, and liquid portfolio, which includes cash, cash equivalents and U.S. Treasuries. Tether will continue to focus on safeguarding those reserves as it has done for years.
While the situation with FTX has caught many people by surprise given their reputation and size, FTX is not indicative of the practices of all substantial players in the industry. Tether has been committed to, and has delivered on its commitments, strengthening its balance sheet and improving the quality and liquidity of its collateral wherever possible.”
CI has received another comment from Enzo Villani, CEO of Alpha Sigma Capital, a crypto investment fund. Villani stated:
“… there is still a lot in flux but there are several important points we want you to know:
Alpha Sigma Capital has no exposure to FTX or Alameda.
Alpha Sigma Capital does not own and did not have any exposure to the FTT token.
Alpha Sigma Capital tokens are held in custody unless actively trading.
Our fund is hedged and should come out flat to slightly positive on the month. Counterparty risk has increased and there is a general sentiment in the market that more bodies will float to the surface as the days go on.”
There are probably more platforms doing the same…