After Sam Bankman-Fried’s crypto empire imploded last week, exchanges are rushing to soothe the nerves of infuriated investors. Digital banking firm, Revolut is the latest one to distance itself from FTX.
In an emailed statement, Revolut told users that it did not have “material exposure” to the bankrupt crypto exchange.
Revolut Monitoring the Situation
The London-based company said it is still monitoring the situation while reminding the volatility associated with digital assets.
“This is a good reminder that crypto is very volatile: the value does go down, as well as up. So, remember to only invest what you can afford to lose.”
It is important to note that the FTX chief tweeted that users could transfer money in fiat currencies between his exchange and Revolut in June last year. Despite this, the latter’s spokesperson has confirmed that the company does not have any direct exposure to FTX.com or its sister trading firm Alameda Research. Additionally, Revolut has very little indirect exposure and does not allow trading in FTX’s native – FTT token.
Other platforms, such as Robinhood Markets, have also confirmed having no direct exposure to FTX. In fact, its Chief Executive Officer Vlad Tenev claimed that customers were turning to the trading app in a “flight to safety” after the collapse.
A NY-based investing company, Public, notified its members this week, assuring that it does not have “any direct exposure” to FTX, Alameda, or FTT. Stephen Sikes, Public’s chief operating officer, went on to assert that customers did not have access to FTT on their platform since it was not listed by US-based firms.
Legal Woes for FTX
FTX is currently battling bankruptcy with an $8 billion deficit in its financial records. This week, the court-appointed Bahamian liquidators claimed signs of “serious fraud and mismanagement” on the bankrupt crypto exchange’s part. Brian Simms, the provisional liquidator, questioned the validity of a Chapter 11 bankruptcy filing by subsidiary FTX Trading and the collective 130 affiliates in Delaware court.
The high-profile collapse will undoubtedly trigger several criminal and civil actions against FTX as well as its executives, such as Bankman-Fried. Furthermore, regulators across the world are also expected to double down their initiatives on crypto regulation.