Trending Topics

Investors Worry About Their FTX Holdings As Company Collapses

By Claire Ballentine and Charlie Wells

Sam Bankman-Fried was an anchor for investors during the  crypto meltdown earlier this year. But the tables have turned dramatically.

FTX logo displayed on a phone screen and representation of cryptocurrencies are seen in this illustration photo taken in Krakow, Poland on November 14, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

News that Bankman-Fried’s would be taken over by billionaire Changpeng “CZ” Zhao’s Binance Holdings shocked the retail trading community, many of whom viewed the exchange as a relative safe haven. Its 30-year-old founder had become a face of crypto as he amassed a multi-billion dollar fortune and bailed out troubled companies in the industry.

Now, crypto investors — who already endured a brutal plunge in prices — are grappling with the takeover and what it means for their investments. Some have taken their money off the beleaguered FTX platform, scared by the recent liquidity crunch. Others are using the volatility as an opportunity to trade, or buy more crypto in hopes of a rebound later. FTX has said it has over 1 million users, while Zhao has said Binance has 120 million.

Bitcoin tumbled 6% to around $17,565 on Wednesday, its lowest level since November 2020, while Ether tumbled 8%.

“I can’t believe it, there was always this feeling that FTX was the chosen one, and you would see all the established players on FTX,” said Ben Iyamu, who lives in the UK and works in the pharmaceutical industry. “There was always this feeling that they were going to topple Binance.”

Iyamu said he has some money in Binance, but mostly holds his coins — including Bitcoin and Stellar — in offline storage. He’s even more keen to do that now, after seeing the chaos around exchanges and how some users of insolvent platforms have had their accounts locked.   

That’s also what Matt Brown in Atlanta is doing. When he first heard about FTX having liquidity issues, he took out his crypto holdings worth more than $100,000. 

“I was panicking and got on my computer on Sunday and started transferring everything out,” said the 29-year-old mechanical engineer. “You just never know where this is going to go. My opinion was that FTX was one of the best exchanges in the US.”

Right now, Brown is storing his coins, including Bitcoin, Ether, Litecoin and Solana, on Coinbase Global Inc. He said he plans to soon transfer them offline to “cold storage.”

“When they own your keys, they own your crypto,” he said, repeating a popular mantra in the crypto community about the risks of handing your assets to someone else.  

Trading Opportunity 

For Ryan Sperin, a 37-year-old trader in Long Island, New York, the volatility spurred by the news is a chance to make money.

“I know this probably hurts investors, but I’m kind of here as a mercenary, and when this show is over I will gladly just find the next game at the casino to take advantage of,” he said. 

Sperin said he mostly trades around Solana and Bitcoin, although he also has some long positions in Bitcoin and Ether. The fact that a titan like FTX could fall has shown him that no one in crypto is invincible, he said. 

 “There’s been blood in the water and CZ has clearly played the best game of chess that I’ve ever seen,” he said. “There’s 3D chess, and this is like 4D chess.”

Jeff Wagner,  a trader in British Columbia, is also using the swings to his advantage. He’s traded on several exchanges including Binance but is wary of keeping any long-term holdings on online platforms. 

“I don’t know why people would leave their tokens on an exchange unless they are actively trading it,” he said. “Get your own wallets and hardware.”

(updates with numbers of users in third paragraph and crypto prices in fourth)

More stories like this are available on

What people are saying

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Back to top