Welcome to VijayKittu.com

The Aftermath of the FTX Cryptocurrency Exchange Collapse

Book Chapter

Authors: Vijaya Kittu Manda, Dr. Anuradha Yadav

Book Name: Financial Dynamics: Emerging Trends and Strategies

ISBN: 978-81-19567-82-9

Publisher: Eureka Publications

Book Chapter Number: 13

Publication Date: 2023

Pages: 104-110

Abstract: FTX-the world's second-largest cryptocurrency exchange, collapsed and filed for bankruptcy. The incident brought jitters to the cryptocurrency market, experiencing a prolonged crypto winter as most digital assets were depreciating. The collapse of FTX added fuel to the fire and sparked a domino effect leading to the collapse of several other financial institutions involved or linked with the cryptocurrency business. The situation exposed that the business plan and strategies of companies in the digital assets business are inadequate. The overall series of events has put the sentiments and has put cryptocurrency traders and investors into a dilemma questioning the existence and sustainability of the newly blossoming industry. Findings from the case will case key learnings for investors who are generally keen to experiment and jump quickly to test and try financial products.

Keywords: crypto assets, contagion effect, domino effect, counterparty risk, money laundering

DOI: https://doi.org/10.5281/zenodo.10207831

Google Scholar Link | Research Gate Link