The FTX crash which happened within a matter of days, with a 75 per cent drop in value for its native token FTT in just 24 hours, has triggered fear among crypto owners. Investors have started pulling out of cryptocurrencies, with assets under management plunging to lowest levels in two years at $22 billion. In the midst of this bloodbath following the sudden crash of Terra, Three Arrows and FTX, crypto exchange Bitfront has decided to wrap up its operations in a phasewise manner in a span of four months.
Protecting investors from the bears?
As the bears mauled the crypto market throughout 2022, more than 25 major crypto exchanges had to shut shop by July 2022, after the Terra-Luna crash. Sam Bankman-Fried who emerged as a saviour for smaller exchanges to allay fears of investors, watched helplessly as his own firm FTX crumbled in a flash. With confidence in crypto wearing off, Japanese social media giant LINE’s exchange Bitfront has suspended operations, with an assurance to pay investors back.
Pulling back step by step
Although the firm claims that the decision is unrelated to the fallout of the FTX fiasco, Bitfront has been shut down in the interest of other blockchain operations including LINE NFT.
New sign ups and credit card payments have been stopped, and new deposits as well as interest payments will be stopped from December 12.
Interest for deposit will be paid between December 5th and 11th, while forced withdrawals for interest-based products will be processed by mid December.
By the end of the year, deposits made via crypto and US dollar will also be phased out, before trading is stopped.
Investors can continue to withdraw their investments till March 31, 2023, after which clients can claim their assets in respective states, while global investors can claim them in Delaware.
All the data collected on customers of the platform, will also be wiped clean within 40 days of March 31, 2023.
Rising with the blockchain breeze
Tokyo-based LINE had entered the crypto space in 2019 with Bitmax, but launched Bitfront as a global exchange only in 2020. It also launched a cryptocurrency called Link, before the parent firm was merged with Yahoo Japan in 2021. This year LINE also launched an NFT trading platform LINE NFT, which will remain operational, despite Bitfront ceding to challenges.
Breaking the chain of chaotic crypto crashes
FTX, which was the latest crypto exchange to fall, collapsed because of a sudden sell off by investors over reports about Alameda capital’s massive debt with FTT as collateral. Amidst the chaos, about $1 billion of client funds have also gone missing, aggravating the mess left behind by SBF. Bitfront’s move to shut shop in a stepwise manner with assurances to clients, could be aimed at avoiding a sudden crash.
Does crypto-winter affect India?
As global crypto exchanges are concerned due to the fallout of the FTX crash, Indian firms such as WazirX and Coinbased are also firing huge chunks of their workforce. The exchanges operating in India are also under stress after losing investors to Binance, after the Indian government announced taxes on crypto transactions and profits earned from trading.
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