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HomeAltcoinsSmall cryptocurrency exchange might fail very soon: Read further to know more

Small cryptocurrency exchange might fail very soon: Read further to know more

Sam Bankman-Fried, the director of FTX, claims that some cryptocurrency exchanges are already bankrupt in secret and will soon fail.

As per Forbes, some third-tier digital currencies are already bankrupt and may eventually fail, according to FTX founder Sam Bankman-Fried.

Bankman-Fried chose not to further detail these conversations and stated:

“There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved,”

Several well-known crypto CEOs believe that there are now too many currencies and blockchains and that the bear market will eradicate those that don’t offer lasting value. The first cryptocurrency executive to make the remark that there are too many exchange platforms and that the market would eliminate the majority of them along with the majority of currencies and blockchains is Bankman-Fried.

Exchange platforms

FTX by Bankman-Fried is one of the best in the business, but there are over than 600 The top 60 platforms are evaluated in a study by Forbes evaluating the world’s cryptocurrency trading. 

Bankman-Fried said that some minor exchange are already facing financial woes and may soon have to file bankruptcy. During the bullish trend, it was simple to keep up with the high returns that the bulk of these exchanges guaranteed to their consumers. However, if investors remove their funds during the downturn, these pledges suddenly appear to be a ticket to bankruptcy.

An Australian exchange platform had to permanently halt operations earlier in June as a result of market circumstances. In the meanwhile, several cryptocurrency exchanges, including the top 10, are deciding to scale back and let up to 25% of their workforce go.

Exchanges leaning on M&A

Only Bankman-FTX Fried’s and Binance appear to be performing well in the present market environment. They either contemplated increasing their mergers and acquisitions or they have already purchased other businesses.

FTX

FTX has already made a significant investment in M&A by purchasing a stake in BlockFi as well as downsized companies Voyager Digital and Robinhood.

FTX U.S. president Brett Harrison recently told CNBC:

“We’re doing that globally, in places like in Japan, Australia, in Dubai, different places where we’ve been able to either partner with local companies or sometimes do acquisitions to be able to get licenses that we need,”

Binance

Binance also speaks of leaning more towards M&A. Binance’s CEO Changpeng Zhao recently said:

“We have a very healthy war chest, we in fact are expanding hiring right now. If we are in a crypto winter, we will leverage that, we will use that to the max. […] we’re kicking into high gear in terms of M&A activity.”

Ripple

Ripple, on the other hand, stated it was only considering M&A and declined to shrink. The exchange, however, remained with its original recruitment strategy and still brings on new employees.

Brad Garlinghouse, CEO of Ripple, predicted that the cryptocurrency market will transition to an M&A-based industry.

 

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