FTX bankruptcy surprises put pressure on cryptocurrency lenders

FTX bankruptcy surprises put pressure on cryptocurrency lenders
FTX bankruptcy surprises put pressure on cryptocurrency lenders

Advance warning

Indeed, for many in decentralized finance, who trust these transparent logical algorithms more than centralized human-run firms, the latest problems are a “we’re-right” moment.

Chris Zuelke, global director of Cumberland, the cryptocurrency arm of Chicago-based trading giant DRW, said that when Celsius and Voyager first started running into trouble, it was difficult to quantify their financial strength. Because all the relevant information was not available in the “blockchain” that anyone could see.

The money flows show that now, with an FTX bankruptcy putting the funds of another group of clients at risk, some cryptocurrency investors are turning to decentralized finance to avoid a similar fate.

Of course, decentralized finance has its risks. Terra’s blockchain lending protocol, Anchor, was in effect a decentralized finance project, though Do Kwon and Kwon’s Terraform Labs’ control over it meant it wasn’t exactly the world. The ideal in decentralized finance favored by proponents.

How did former crypto giant Do Kwon become a fugitive from justice?

Nevertheless, transactions were transparent and visible to all, withdrawals were not halted, and bankruptcy courts never interfered. It’s just that when it crashed, these withdrawals were made at pennies per dollar, or less, compared to what depositors invested.

The article is in Arabic

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