Cryptocurrency Exchanges Scramble to Contain FTX Fallout

Following the spectacular collapse of FTX and its Democrat super-donor founder Sam Bankman-Fried, other centralized cryptocurrency exchanges are scrambling to shore up their reputation and contain the fallout.

During a Q&A on Reddit, the CEO of Crypto.com, Kris Marszalek, reassured users that funds the top-ten exchange had sent to FTX had (mostly) been recovered.

“Over a year, $1 billion was moved to FTX, and we recovered all of this,” said Marszalek. “We only had exposure of under $10 million when FTX shut down. And FTX was a trading venue where — this is one of the few trading venues with decent liquidity for some of the coins, like the ones I mentioned earlier.”

Marszalek also had to answer questions about $400 million in Ether that was mistakenly sent to another centralized crypto exchange, Gate.io. Both Crypto.com and Gate.io said the funds were sent in error and were returned.

The U.S.-based cryptocurrency exchange Kraken also moved to insulate itself from the FTX fallout, freezing accounts associated with the exchange and Alameda Research, the trading company also owned by Bankman-Fried.

Kraken has spoken with law enforcement regarding a handful of accounts owned by the bankrupt FTX Group, Alameda Research and their executives. Those accounts have been frozen to protect their creditors.

Other Kraken clients are not affected. Kraken maintains full reserves.

— Kraken Exchange (@krakenfx) November 13, 2022

“Kraken has spoken with law enforcement regarding a handful of accounts owned by the bankrupt FTX Group, Alameda Research and their executives. Those accounts have been frozen to protect their creditors,” said the official Kraken account on Twitter. “Other Kraken clients are not affected. Kraken maintains full reserves.”

The value of Solana, a blockchain platform that was heavily backed by Alameda Research and was the token most closely associated with FTX, has tanked in recent days as news regarding the exchange and its founder went from bad to worse.

The value of SOL, Solana’s cryptocurrency, crashed by over 50 percent last week, hitting a low of $12.07, a colossal fall from its high of nearly $260 at the peak of the crypto boom in November 2021.

Allum Bokhari is the senior technology correspondent at Breitbart News. He is the author of #DELETED: Big Tech’s Battle to Erase the Trump Movement and Steal The Election.