The fallout of FTX’s fall continues to spread—as other exchanges are now pausing withdrawals.
Key Details
- Monday morning saw a rally for the crypto economy following a week of chaos. Bitcoin rose 7.1%, Ethereum rose 7.7%, and Solana rose 16.3%.
- It was the first positive sign for crypto after one of the largest crypto exchanges FTX collapsed between Tuesday and Friday, with caused the entire crypto market to crash—destroying $200 billion in market value and tying up $9 billion in crypto in the company’s bankruptcy with little hope of withdrawal for investors.
- Other exchanges are being hit hard by the crash too, leading to glitches, panics, and fears of liquidity crises at other major exchanges.
- The AAX exchange went as far as to suspend withdrawals and expects to be inaccessible for seven to 10 days, although it denies it is facing a similar liquidity crisis.
- The company says in a statement that withdrawal forms are available in the meantime until the system is back up and running.
Why it’s News
The AAX exchange is blaming the withdrawal pause on a glitch in its systems and not as a result of the FTX collapse. VP Ben Caselin tells Bloomberg that FTX has put pressure on the entire market and made users nervous—but that AAX’s “funds are intact” and that it expects to see the withdrawal pause resolved shortly.
“AAX claims the halt is due to a ‘third party partner’ whose system was failing during a ‘system upgrade’ that was previously ‘scheduled,’ and has nothing to do with the implosion of FTX,” says Gizmodo.
Other major exchanges like BlockFi and Galaxy Digital are similarly suffering the fallout from the collapse of FTX, as Bloomberg reports.
Notable Quote
“In light of the insolvency of one of our industry’s largest players last week, crypto users are rightfully concerned about the operational and financial stability of centralized digital asset exchanges. At AAX, we have always put our users first, and we would like to share with you the following updates regarding our current situation. We are hopeful that as a community, we can brave through these troubling times together,” says AAX.
