Concerns over global cryptocurrency crisis have Vietnamese investors on edge

By Dang Khoa   November 17, 2022 | 08:27 pm PT
Concerns over global cryptocurrency crisis have Vietnamese investors on edge
Representations of cryptocurrencies are seen in front of displayed FTX logo and decreasing stock graph in this illustration taken November 10, 2022. Photo by Reuters/Dado Ruvic/Illustration
Millions of investors, including in Vietnam, are losing money in the crypto crisis caused by cryptocurrency exchange FTX declaring bankruptcy and lender BlockFi preparing to do so.

According to Bloomberg, BlockFi Inc. will file within days.

The crypto lender has paused client withdrawals citing uncertainties with FTX though claiming to have adequate liquidity.

As of 2021 BlockFi had US$14-20 billion worth of customer deposits and had lent out $7.5 billion.

It is closely tied with FTX US. In July the latter extended to it a $400 million revolving credit line along with an option of buying it out.

BlockFi has given loans to now-bankrupt Alameda Research.

FTX, once the world’s second biggest crypto exchange, filed for bankruptcy last week, but its founder, Sam Bankman-Fried, thinks he can raise enough money to make users whole.

FTX, which was valued at $32 billion in a financing round earlier this year, has frozen trading and customer assets and is seeking to discharge its creditors in bankruptcy court.

The tokens it holds are now valued at just $659,000 compared to the $5.5 billion Bankman-Fried appeared to value them in a term sheet leaked last week.

Not only did investors who traded on the FTX platform or invested in the FTX Token lose money when the company went bankrupt, but the event also sharply pushed digital currencies down.

Last week Bitcoin lost 20% of its value and sank as low as $15,700. Ethereum also tanked by more than 20%.

The market expects Bitcoin to fall to $13,000 in the near future.

The failure of FTX Group made a lot of investors in Vietnam unhappy. In many online cryptocurrency communities, people complain that they cannot get their money out of the FTX token and trading platform.

The official FTX Telegram group for Vietnamese has about 10,000 members, but is no longer working.

Nguyen Huu Huan, a professor at the University of Economics HCMC, told local media that crypto is a risky investment, and the crash of the FTX exchange shattered investors' trust and confidence in the crypto market.

The decline of the market would continue, and perhaps requires a newer methodology, he added.

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