Hello guys, with increase in the market conditions I hope you all are doing ok. Today I came across a post which has given the details behind the downfall of most of the crypto firms from the last few months.
Crypto firms are trying to establish their firm like a bank which provides attractive interest rates to their customers holding crypto currency like bank system provides. From the past few months many crypto firms which has their hands on lending platform had fall downhill like Voyager Digital, Celsius and Blockfi has filed for either bankruptcy or protection against the invested customers.
Last week only Genesis had filed for Chapter 11 for their lending part firm. Most of the lending platforms has collateral damage option without it, there is no lending to the customer. Time being pass the collateral damage funds had become higher and higher compared to the funds you receive through lending. When the market started falling the crypto currencies which are under collateral damage had become from less price to nothing. Then the Celsius and Voyager Digital had began to liquidate their assets because of the hedge funds lending to Three arrow capital. Blockfi has also followed the same path, but when FTX owner Sam Bankman fried had offered help to give a lifeline to Blockfi. After sometime FTX exchange has also filed for bankruptcy due to the high risk lending of hedge funds to the affiliate of Almada Research.
Hence, the rules of crypto industries should needs to be amended so as to provide a minimum of safeguard to the depositers. Hope you all like my post, please follow and upvote my post.