The wave of bad events triggered by the collapse of FTX and Alameda have drawn the attention of regulators on centralized cryptocurrency exchanges. While the timeline to recover FTX assets may take years, global regulators have taken this period to implement proper crypto regulations. After the procedure of voluntary filing of chapter 11 bankruptcycountries are now more aware of how sophisticated the crypto market is.
Furthermore, the case of FTX and its officials may take years, and some analysts predict it may take more than a decade. Meanwhile, FTX’s assets, including businesses acquired during Sam Bankman-Fried’s tenure, are imminently up for auction. Crypto investors including Ripple are eyeing FTX assets.
Regulators investigating the FTX case have questioned Alameda’s use of FTT tokens to facilitate unhealthy lending. Alameda reportedly lost more than $8 billion of client funds in risky lending deals. As such, the FTT token became too leveraged in a falling crypto market.
Countries Significantly Affected by the FTX Collapse
FTX has been regulated in several jurisdictions thanks to its committed financial backing from well-known investors. Furthermore, the company has earned the trust of millions of global crypto customers, who have been left stranded. Also, how will the millions of FTX clients trust centralized exchanges again in the future?
According to a study report by Coingecko, South Korea experienced the highest FTX traffic share of 6.1%, representing approximately 297,229 unique users on average visiting the site on a monthly basis.
In particular, the fallout from FTX has forced the South Korean government to push through the Digital Assets Basic Law, a comprehensive regulatory framework that is expected to be finalized next year.
Singaporean cryptocurrency users, who primarily used FTX after the Binance shutdown last December, were the second most affected, accounting for about 5% of traffic to FTX.com globally. In real numbers, this represents a monthly average of 241,675 unique FTX users.
The third country most affected by the consequences of FTX is Japan, with a 4.6% share of traffic, which represents a monthly average of 223,513 unique users.
On the other side of the consequences
Cryptocurrency and blockchain enthusiasts, including Changpeng Zhao Y Brian Armstrong, have increased personal initiative to drive cryptocurrency adoption globally. However, countries are less likely to be lenient towards crypto companies looking for foreign investors.
Regulatory agencies in the United States, including the CFTC and SEC, are reportedly looking into the FTX case. However, the slow crypto-sponsored US congressional process shows that the cryptocurrency market has more pain to swallow.
