Home Crypto News Trust in Crypto Exchange Tokens Recovered from FTX Lows

Trust in Crypto Exchange Tokens Recovered from FTX Lows

23 Feb, 2024 Crypto News

Trust in Crypto Exchange Tokens Recovered from FTX Lows

Exchange tokens have largely bounced back from their lows during the FTX bankruptcy saga and either regained strength or reached unprecedented peaks amid the ongoing bullish market sentiment.

As of the time of reporting, Binance's native token, BNB, is presently valued at $352, marking a significant surge of 32% since November 2022, when FTX, a troubled cryptocurrency exchange, declared bankruptcy, sparking widespread concern throughout the crypto exchange sector.

Furthermore, BNB is trading above its previous peaks in June 2023, a period marked by revelations of an ongoing investigation by the U.S. Department of Justice (DOJ) into the exchange and an ensuing lawsuit filed by the U.S. Securities and Exchange Commission (SEC).

While the exchange has settled with the DOJ for $4.3 billion, the SEC lawsuit remains unresolved.

Exchange tokens, which are issued by centralized entities themselves, offer users various trading advantages on exchanges.

They can also be utilized for covering gas fees and participating in decentralized finance activities on blockchains established by centralized exchanges.

Additionally, some exchange tokens enable users to engage in the governance processes of the platform.

Meanwhile, OKX exchange's native token, OKB, has experienced a remarkable increase of 132% from its lows during the FTX crisis, accumulating an impressive total gain of 3,227% since its inception in May 2019.

On January 25, the OKB token underwent a substantial flash crash, wiping out nearly $6.5 billion within minutes before fully recovering and reaching new record highs.

This abrupt market turbulence was triggered by a brief sell-off, resulting in multiple leveraged liquidations across pledged lending, margin trading, and cross-currency transactions on the OKX platform.

The exchange has since compensated affected users through an airdrop.

Similarly, Bitget exchange's BGB token has surged to unprecedented highs of $1.03, registering an annual increase of 159%.

Last September, the exchange announced the establishment of a $100 million fund named "EmpowerX," earmarked for supporting blockchain, AI, and Web3 projects.

Gracy Chen, managing director of Bitget, stated at the time that the company anticipates more investments, mergers, and acquisitions in the forthcoming months as the landscape of centralized exchanges evolves in response to regulatory shifts.

Predictably, FTX's FTT token has experienced a significant decline of over 90% compared to its pre-bankruptcy peaks.

While the exchange anticipates full repayment to customers, excluding bankruptcy-related fees, it will not resume operations itself.

“No investor is ready to commit the needed capital to a restart of the offshore exchange, nor has a buyer emerged for that exchange as a going concern," said bankruptcy lawyer Andy Dietderich. “The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in the dumpster were simply too high.”


Sources:

https://cointelegraph.com/news/trust-crypto-exchange-tokens-recovers-ftx-lows

https://www.okx.com/cn/help/update-regarding-okb-price-volatility

https://coinmarketcap.com/currencies/bitget-token-new/

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