Burning flames from the FTX collapse continue as damages spread throughout the crypto market and industry. FTX is left to themselves as other firms cannot assist due to the magnitude of debts incurred by the exchange. Binance initially intended to help but later acknowledged that the situation was beyond its power.
Meanwhile, the latest reports have revealed that the embattled crypto firm has filed for Chapter 11 Bankruptcy. The FTX crisis has plunged many crypto firms into debt and losses, including Huobi’s subsidiary, Hbit Limited.
Hbit Limited revealed in an official announcement that it failed to withdraw $18.1 million worth of assets deposited on FTX.
According to the announcement, $13.2 million out of the total value stuck on FTX belongs to Hbit’s clients. This is because the firm deposited the assets on FTX as per clients’ trading requests. The remaining $ 4.9 million belongs to Hbit Limited.
However, the firm announced that it would seek legal assistance and follow the necessary steps to recover the assets from the collapsed crypto exchange.
Impending Financial Crisis For Hbit
According to Hbit’s announcement, the issue may negatively impact its financial performance if not resolved accordingly. However, it revealed that the incident does not affect other business operations of Huobi Group since Hbit is a separate entity. Therefore, different lines of business of the group will continue their everyday operations.
Contagion fears from the FTX collapse have spread to other crypto exchanges as the majority are experiencing increased selling pressure. Crypto.Com is one of the crypto exchanges facing such challenges.
CRO, the native token of Crypto.com, is down by 45% after suffering a massive sell-off since the FTX fiasco. It started with rumors that the crypto exchange might be a victim of the ongoing liquidity crunch. But the CEO of Crypto.Com, Kris Marszalek, dismissed the rumors, claiming they recovered $990 million from FTX.
Marszalek assured users that Crypto.Com maintains a strong balance sheet. He added that his firm’s exposure to the newly collapsed exchange is at most $10 million.
Update On The FTX Crisis
According to the FTX bankruptcy filing, the exchange valued its assets between $10 and $50 billion. It also listed over 130 affiliate companies around the world. Many affiliated companies joined in the bankruptcy filing in Delaware on Friday.
The FTX crisis brought a sudden turn of events for Sam Bankman-Fried, who helped some crypto firms out of their financial trouble earlier this year. Meanwhile, on Saturday, FTX confirmed that there was an unauthorized access to its accounts a few hours after the bankruptcy filing.
The news stirred reactions about whether the exchange got hacked or an insider stole the funds. While the amount of money involved remains to be determined, analytics firm Elliptic estimated that $477 million is missing from the exchange. Meanwhile, FTT has lost 97.19% of its valuation since the crisis and is now trading at $1.804.
Featured image from Pixabay, chart from TradingView.com