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Just how big if the “FTX Domino Effect”? - Episode 312 - by cryptohunt.it
Just how big if the “FTX Domino Effect”?
Welcome to the Cryptohunt Jam, where we spend one minute a day explaining crypto. In plain English - so that you can form your own opinions to be safer out there in the wild crypto space.
A few episodes back, we introduced the idea of the “FTX Domino Effect”. It describes the nuclear fallout from the FTX collapse: Companies that were financially entangled with FTX are falling one by one, like domino stones.
But just how big is the FTX Domino Effect, actually? Soon, we may find out, at least as far as publicly traded companies and the United States go. Here’s why.
Over the weekend, the SEC, short for “Securities and Exchange Commission”, sent out a note to all of the companies it oversees. The agency’s job it is to ensure that these stay in compliance with laws and regulations to remain transparent about their business to investors. And the SEC takes their job very seriously - in this case demanding all companies to publish if and what exposure they had to FTX’s downfall.
To understand just how important that is, you have to understand how most of the companies that fell like dominoes in the wake of FTX, actually mishandled the situation. Just like FTX itself, they didn’t tell anyone about their troubles, hoping that they would secretly be able to turn things around without you ever noticing. But a turnaround rarely happens as the examples of BlockFi and Genesis show: They either disabled customer withdrawals or went bankrupt.
The real problem here is that they give customers no choice to withdraw before it is too late. By the time things are too bad to turn around, your money is gone. They want to hold on to your money: It’s selfish, and in most cases likely criminal.
And that’s why the SEC is becoming proactive, reminding at least the companies it oversees to play by the rules and of the consequences they face if they don’t. We think it’s the right move, but only affects a subset of companies in the United States.
The only way to protect yourself is to go through the hassle of managing your own wallets - we have a course on that at www.cryptohunt.it and a weeklong special starting with episode 295 on this podcast.
I see you tomorrow, stay safe out there!
This podcast is produced by Cryptohunt.it, the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, design is done by Carmen Rincon, and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
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By cryptohunt
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Just how big if the “FTX Domino Effect”?
Welcome to the Cryptohunt Jam, where we spend one minute a day explaining crypto. In plain English - so that you can form your own opinions to be safer out there in the wild crypto space.
A few episodes back, we introduced the idea of the “FTX Domino Effect”. It describes the nuclear fallout from the FTX collapse: Companies that were financially entangled with FTX are falling one by one, like domino stones.
But just how big is the FTX Domino Effect, actually? Soon, we may find out, at least as far as publicly traded companies and the United States go. Here’s why.
Over the weekend, the SEC, short for “Securities and Exchange Commission”, sent out a note to all of the companies it oversees. The agency’s job it is to ensure that these stay in compliance with laws and regulations to remain transparent about their business to investors. And the SEC takes their job very seriously - in this case demanding all companies to publish if and what exposure they had to FTX’s downfall.
To understand just how important that is, you have to understand how most of the companies that fell like dominoes in the wake of FTX, actually mishandled the situation. Just like FTX itself, they didn’t tell anyone about their troubles, hoping that they would secretly be able to turn things around without you ever noticing. But a turnaround rarely happens as the examples of BlockFi and Genesis show: They either disabled customer withdrawals or went bankrupt.
The real problem here is that they give customers no choice to withdraw before it is too late. By the time things are too bad to turn around, your money is gone. They want to hold on to your money: It’s selfish, and in most cases likely criminal.
And that’s why the SEC is becoming proactive, reminding at least the companies it oversees to play by the rules and of the consequences they face if they don’t. We think it’s the right move, but only affects a subset of companies in the United States.
The only way to protect yourself is to go through the hassle of managing your own wallets - we have a course on that at www.cryptohunt.it and a weeklong special starting with episode 295 on this podcast.
I see you tomorrow, stay safe out there!
This podcast is produced by Cryptohunt.it, the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, design is done by Carmen Rincon, and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.