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Systems and mechanisms are in place at Indian crypto firms to prevent a disaster like FTX
After a quick fall from glory, cryptocurrency exchange FTX filed for Chapter 11 bankruptcy protection on November 11, 2022. In a couple of days, the company’s value plummeted from $32 billion to bankruptcy, bringing founder and CEO Sam Bankman-$16 Fried’s billion net worth to almost nothing. The unstable cryptocurrency market was shaken by the demise of FTX; it lost billions in value and fell below $1 trillion. The fallout from FTX’s abrupt slide and collapse will probably have an effect on cryptocurrencies for a very long time to come and may even cause wider market declines. Sam Bankman-Fried is accused in a class-action lawsuit brought on Nov. 16, 2022, in a federal court in Florida of developing a fraudulent cryptocurrency scheme intended to take advantage of uneducated investors from all over the nation. Other famous people who allegedly assisted Bankman-Fried in carrying out the scheme are listed in the case, including Steph Curry, Shaquille O’Neal, Shohei Ohtani, Naomi Osaka, Larry David, and Kevin O’Leary. The U.S. House Financial Services Committee announced that it will hold a hearing on the FTX collapse in December 2022.
Indian firms who provide wallet management, bitcoin stacking, and other crypto asset management services claimed to have processes and protocols in place to ensure that their users never experience an incident similar to FTX. Investors are concerned about the transparency, reserve levels, security, and internal controls used by cryptocurrency companies as the FTX virus spreads throughout the ecosystem. Leading cryptocurrency investment platform Mudrex claimed that it always keeps investors informed of all activities involving their funds, does not use leverage or operate on investor funds in any way, stores its assets securely and is backed by real assets at a 1:1 ratio, and uses distinct hot/warm/cold wallets for storage and transactions.
“For the past five years, we have existed in the cryptocurrency industry and have weathered numerous ups and downs. According to Edul Patel, founder of Mudrex, “We have always emphasized that user funds are of the utmost importance and should never be put at risk.” The consumers got to keep their funds in their preferred wallets/exchanges, according to Khaleelulla Baig of Koinbasket, a thematic cryptocurrency investment platform, who claimed that his company didn’t take on the danger and hassle of taking custody of user assets.
GoSats, a Bitcoin stacking business, co-founded and CEO Mohammed Roshan said the company adhered to the bitcoin industry’s principle of “not your keys, not your coins.” “We process withdrawals using multi-signature storage with BitGo, the market leader. In order to maintain control over their digital assets, we advise users to store them in multi-signature or hardware wallets “he stated.
While cryptocurrency businesses and exchanges have implemented a number of security measures to safeguard customers and provide a more secure environment, experts say investors must also be proactive in protecting their assets. “Investors should steer clear of complicated trading activities including arbitrage trading, futures and options trading, margin trading, and short selling regardless of the asset class, be it stocks, commodities, currency, or cryptocurrencies. Retail investors need to develop the practice of removing unspent funds from exchanges. Baig of Koinbasket advised investors against mindlessly following influencers who are not familiar with cryptocurrency or anyone who advertises products without providing adequate disclosure. “Keeping an eye on the most recent advancements in the crypto business is crucial.”
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