After the collapse of Sam Bankman-Fried’s cryptocurrency empire last week, exchanges are scrambling to calm the nerves of jittery investors. Digital banking company Revolut is the latest company to distance itself from FTX.
In an email, Revolut told users that it had no “material exposure” to the bankrupt crypto exchange.
Revolut is monitoring the situation
The London-based company said it was still monitoring the situation and keeping in mind the volatility associated with digital assets.
“This is a good reminder that cryptocurrency is very volatile: the value goes down as well as it goes up. So remember to only invest what you can afford to lose.”
It is important to note that FTX Manager chirp that users can transfer money in fiat currencies between his company and Revolut last June. Despite this, a spokesperson for the latter confirmed that the company has no direct exposure to FTX.com or its sister business, Alameda Research. In addition, Revolut has very little indirect exposure and does not allow trading of the native FTX – FTT token.
Other platforms, such as Robinhood Markets, have also confirmed that they have no direct exposure to FTX. In fact, its CEO, Vlad Tenev, claimed that customers turned to the trading app for a “journey to safety” after the crash.
New York-based investment firm, Public, notified its members this week, asserting that it had “no direct exposure” to FTX, Alameda, or FTT. Stephen Sykes, Public’s chief operating officer, went on to claim that customers were unable to access FTT on its platform because it is not listed by the US-based companies.
FTX Legal Problems
FTX is currently battling bankruptcy with an $8 billion shortfall on its financial records. This week, court-appointed Bahamian liquidators claimed evidence of “serious fraud and mismanagement” on the part of the bankrupt cryptocurrency exchange. Brian Simms, the interim liquidator, has challenged the validity of a Chapter 11 bankruptcy filing by FTX Trading’s subsidiary and 130 merged affiliates in a Delaware court.
The major collapse will undoubtedly lead to multiple criminal and civil actions against FTX and its executives, such as Bankman-Fried. In addition, regulators around the world are also expected to step up their cryptocurrency regulatory initiatives.
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