Numerous crashes have repeatedly hit the cryptocurrency sector. The ongoing demise of Sam Bankman Fried’s FTX has left the entire community in a state of extreme fear.
A number of significant developments occurred last week, including Binance withdrawing from helping troubled exchange FTX, and Sam Bankman-Fried starting the process to declare FTX, FTX US, and Alameda Research bankrupt in the United States.
On their end, regulators have begun looking into the business. According to recent reports, more than six international regulatory bodies have stated that they are looking into FTX incidents. But the FTX drama has triggered extreme fear as several exchanges witnessed billions of dollars worth of outflows.
FTX event prompts investors to consider self-custody?
As per the data provided by CryptoQuant, several exchanges witnessed billions of outflows over the span of Nov 6 to 13. The outflow included $3.7 billion worth of Bitcoin and $2.5 billion in Ethereum over the span of last week.
Data also reveals that investors also withdrew over $2 billion in stablecoins during the same period. The fall of Sam Bankman-Fried’s cryptocurrency exchange has had cascading effects on the whole cryptocurrency realm.
The event caused panic, which in turn affected the prices of major cryptocurrencies. The market, which was slowly gaining momentum after the fall of Terra, plunged, wiping off all the gains over the past few weeks.
Many investors question the centralized nature of several of these exchanges. Millions of users who stored their crypto on the FTX exchange are worried about when they will receive their funds. This has also been a major catalyst for billions of dollars in outflows from major exchanges. The current events has also pushed other exchanges to provide complete transparency on customer funds.