Two investment firms – SBF and Alameda – are stepping in to help avoid further contagion in the crypto market. Many major crypto companies, including Three Arrows Capital and Celsius, have hit by liquidity problems. To prevent a major crypto collapse, regulation is essential. As of last week, FTX had already bailed out Japanese crypto exchange Liquid after it had hacked for $100 million. In addition, FTX recently provided Three Arrows Capital with $120 million in funding for the year 2021.
Solana has performed strongly over the past seven days
The crypto market has rattled by disappointing monthly inflation figures, which affected the entire cryptocurrency market. The figures had down slightly from last month but not by as much as economists had hoped. Also, the Federal Reserve recently raised interest rates by 0.50%, and chairman Jerome Powell has warned that further increases may be needed. Whenever interest rates rise, investors tend to pull away from risky assets, including cryptos.
The situation has led some decentralized finance applications to take protective measures. Last week, the Ethereum-based exchange Lido had warned by the German financial watchdog about securities violations. It then launched a stock token trading service. The resulting demand for the new feature caused the coin to jump more than 300%. However, there was still some doubt about the platform’s future, and the government of Germany is examining it carefully.
Regulation can help prevent a crypto collapse contagion
The global footprint of crypto has estimated at $10 trillion, including direct cryptocurrency amounts issued, derivatives, and the leverage created to purchase these instruments. As a result, crypto has the potential to undermine global confidence in financial markets. But this potential is not without risks. Regulation has needed to protect the economy, preserve the global climate, and prevent crypto-induced contagion. Fortunately, regulators are looking for ways to curb the risk.
Currently, the government doesn’t seem overly concerned about the risks of a crypto crash affecting the broader economy. However, Senator Kirsten Gillibrand and Crypto Collapse industry experts have raising concerns about how cryptocurrencies are being regulated. Some experts argue that regulating the cryptocurrency industry in the U.S. is key to its long-term success. Regulators are considering new regulations for this industry, as they believe that the current lack of regulation is hindering growth.
FTX bailed out Japanese cryptocurrency exchange Liquid after it was hacked for $100 million
FTX, a crypto exchange founded by billionaire Sam Bankman-Fried, is bailing out Liquid after it had hacked last week, lending the company $120 million to help it get back on its feet. The exchange has said that the money will used to improve it has balance sheet, to pursue licensing opportunities in key jurisdictions, and to improve customer service.
FTX is a Singapore-based financial firm that bailed out the Japanese cryptocurrency exchange Liquid after it was breached last August. The exchange had hacked and lost a total of $100 million. FTX acquired the company in February and plans to gain additional customers and licenses in Asia. The recent hack also caused a sharp drop in the value of the crypto market in Japan.
While a hack such as this has not common, it has a scary thought for any cryptocurrency investor. The Japanese government has been slow to license cryptocurrency exchanges since the Coincheck hack. In a statement from the FSA, FTX stated that it was “in the process of licensing 100 crypto exchanges in Japan.” The company had previously been in trouble after losing more than $800 million to a hacker.
FTX provided Three Arrows Capital with $120 million in funding in 2021
Three Arrows Capital is a cryptocurrency hedge fund that provides risk-adjusted returns by trading in cryptocurrencies. They also serve as venture capitalists on occasion. Recently, Three Arrows backed Worldcoin, a project that pays people to scan their iris in exchange for cryptocurrency. The fund also receives USDT from Tether, and distributes it through intermediary addresses and trading platforms.
Since launching in 2015, Three Arrows has handled many other cryptocurrencies, including Tether and the yield tokens Aave (AAVE) and Chainlink (LINK). However, their volume is significantly higher than that of the $674 million USDT sent back to Tether. Three Arrows was also responsible for sending out USDT via the Tether Treasuries, but recently switched to receiving them directly from exchanges. The amount of USDT Three Arrows has received from exchanges is unknown, but it is likely the same as the FTX-funded company’s exchange volume. Share you thoughts with the help of write for us