CEO of Wintermute, a leading global crypto market maker Evgeny Gaevoy, has recently disclosed that the FTX saga has set back the adoption of crypto by one or two years.
Gaevoy further disclosed that other bankrupt crypto companies such as Three arrows, Celsius and FTX are currently faced with challenges because they were not completely decentralized and also not properly centralized.
In his words, “Everything that failed this year, if you look at Celsius, Three Arrows, FTX now, all those guys were taking the worst of both worlds because they were not completely decentralized, and they were not properly centralized either”.
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Before the collapse of FTX, Evgeny disclosed that his company Wintermute stopped trading and withdrew a significant amount of its funds from the platform before FTX issued a warning that “trading might be halted despite Bankman-Fried’s assertion that it was not financially impacted by the global FTX exchange’s liquidity problems.
Wintermute was one of the largest market makers on FTX, and it was reportedly the second-largest trading firm by deposit and withdrawal size on the platform.
In September 2022, the company lost a whopping $160 million in a hack that occurred on the Defi platform.
Recall that in October 2022, reports disclosed that crypto exchange platform Defi, was hacked and about millions worth of cryptocurrency was stolen from it, which was followed by a backlash from users on Twitter.
On the impact of the FTX collapse on the crypto industry, it has negatively impacted investors’ confidence.
It has also created a ripple effect in the industry as reports reveal that just over the past week, customers have pulled billions of dollars worth of assets from Binance.
The ripple effects continue to extend through to other platforms, as investors expect to continue to see it play out over the next few months.
With the industry still largely unregulated, this has raised more concerns for investors because their assets don’t have the same protections as that of banks.
The FTX collapse has also led to the high volatility of crypto as Bitcoin, the King of cryptocurrencies, fell as low as $15,600. The crypto market has continued to feel the heat hard, with the market value bleeding out roughly $183 billion.
Also, fears have risen over the financial health of other major crypto exchanges, as following FTX’s failure, some of them have filed for bankruptcy with several others considering doing so.
However, analysts predict that despite the unfriendly state of crypto markets, and the toll it has taken on investors, the digital asset industry is likely to pull through.