Most altcoins also fell significantly, many of them hit even harder. The situation was aggravated by the collapse of one of the largest crypto exchanges FTX, which led to the massive bankruptcy of crypto companies and the depreciation of their associated tokens.

“I would now (and even better a week ago) get rid of various wrapped tokens. We are talking not only about obvious losers, like Wrapped Bitcoin (WBTC) and stETH from Lido, who suffered due to the collapse of FTX and Alameda, who crushed 100 thousand WBTC secured by bitcoins, which now turned out to be not 100 thousand, but 72 thousand The panic touched all the wrapped tokens, even those with no collateral issues. For example, WETH,” said Roman Nekrasov, co-founder of the ENCRY Foundation. He added that now, if possible, he would get rid of all the wrapped tokens. In addition, the expert recommended exiting all Play-to-Earn and similar Move-to-Earn projects.

“Now the market is not up to game mechanics. This is fun for the bull cycle. And so far, none of these projects has shown itself to be long-lasting: everywhere the number of active users has decreased significantly. It is unlikely that the trend will turn in the direction of growth in the near future, ”Nekrasov suggested. Leading analyst at 8848 Invest Viktor Pershikov agreed with him. He classified tokens from the Move-to-Earn sector, such as STEPN, SweatCoin, DOSE and others, as outsiders. The expert also pointed out the high risks in the tokens of some centralized crypto exchanges: the consequences of the collapse of FTX and the next cycle of market redistribution in terms of users and traffic affect it.

“The most risky these days, I would include the Huobi (HT) exchange token, the change in the price of which is manipulative, and KuCoin (KCS), around which FUD is being dispersed on the topic of withdrawing funds by its owners,” Pershikov explained. Assets that dominate the portfolios of companies that have undergone bankruptcy or with serious risks of bankruptcy may also suffer, Nikita Zuborev, senior analyst at Bestchange.ru, added.

For example, Alameda Research has invested large sums in such projects as: Polygon (MATIC), Anchorage Digital, Immutable (XIMX), Voyager Token (VGX), 1inch (1INCH), Near Protocol (NEAR), Helium (HNT).

FTX Ventures invested in Yuga Labs (owner of the Apecoin token and NFT collections of Bored Ape Yacht Club, CryptoPunks and Meebits), Near Protocol (NEAR), Aptos (APT) and BlockFi crypto platform, which is also going bankrupt, and she acted as an investor in the GamerGains project (GAMER).

“And this is just the tip of the iceberg, in fact there are hundreds of projects and they are intertwined with investments in different rounds. Therefore, the risks of indifferent observation are quite high, conscious investors should conduct a serious “audit” of their assets,” Zuborev warned. In the current situation, it is worth carefully checking other related companies and their investments, the expert advised. According to him, the network of projects and their tokens that the now “toxic” investments from the FTX conglomerate have reached is quite wide, so it’s worth finding out about all the large token holders that investors are considering as investments. A series of bankruptcies and sale of assets of funds can be painless for most of these projects, but at the same time, completely ignoring such risks would be too frivolous, the specialist is sure.

After the sudden crash of FTX, many traders panicked and a massive exodus from the exchanges began. The tech-savvy rushed to the DEX, while the most cautious decided to “sit on the fence”, with bitcoins in their personal wallet.

The bankruptcy of FTX is not related to the shortcomings of cryptocurrencies as a technology, so it is most likely that its consequences will be short-term, despite the amount of information noise. The market is influenced by many other, stronger factors. And yet, it will not pass without a trace for the industry and will lead not to collapse, but to the recovery of the market.

The biggest closures of cryptocurrency exchanges and how to protect yourself from them Over the years, the cryptocurrency world was shocked by three high-profile ruins of exchanges, which resulted in losses for hundreds of thousands of customers:

February 2014: The bankruptcy of MtGOX, officially caused by a robbery of 850,000 BTC, was about $480 million at the date of the declaration of bankruptcy. Later, 200,000 BTC were covered by the owner of the exchange, Mark Karpeles, from a reserve wallet. The "hackers" have not yet been found, and research suggests that there was no instant robbery. It is more likely that bitcoins from MtGOX were withdrawn gradually over two years, possibly with the participation of an insider. Bankruptcy was only a public admission of insufficient capital and the impossibility of paying traders.

July 2017: The closure of the Russian-language BTC-e exchange by US intelligence agencies. In the fall of 2018, the WEX exchange slowly died, an unsuccessful attempt to revive BTC-e on a more legal basis. Even after six years, the actual losses and the number of victims are unknown, as well as the location of the main assets of the exchange. Traders are believed to have lost hundreds of millions of dollars on BTC-e. Many versions have remained unproven. The only citizen of the Russian Federation reliably involved in BTC-e, Alexander Vinnik, is in an American prison. The fate of another alleged BTC-e administrator, Alexey Bilyuchenko, remains unknown.

November 2022: The first crash of the relatively legal and public FTX exchange, caused by market factors. Despite the mass of conspiracy theories, no criminal trace has been identified for FTX. The most likely reason for the exchange's bankruptcy remains poor asset management by its subsidiary, Alameda Research.

Participation in dubious projects, the geopolitical crisis and the fall of the markets led to the formation of a “hole” in the amount of up to $10 billion. The owner of FTX, Sam Bankman-Fried, allocated $4 billion, mainly owned by clients, to save the “daughter”. FTX's total debt to creditors could range from $3 billion to $6 billion. This is the largest bankruptcy in the history of the fiat currency industry. However, in bitcoin, losses on MtGOX remain unbeatable.

The interesting thing about these bankruptcies is that they all had different causes. This means that each of them needs its own protection. However, the only protection when using centralized exchanges is constant monitoring of the market and news. And when information about the problems of the exchange appears, the most prudent thing will be to take your feet in your hands and flee. If the rumors turn out to be false, it will not be difficult to return the assets to the exchange.