According to Bloomberg, Cryptocurrency Prime Broker Hidden Road Partners will liquidate its FTX.com holdings tonight.
Marc Asch, who founded Hidden Road Partners in 2018, is a premier brokerage focused on foreign exchange trading and digital assets. Through a “three-way” arrangement with custodians, the company allows banks and other institutions to make or lose profits in US dollars. They can use US dollars as collateral.
Hidden Road Partners encourages users on the virtual currency exchange FTX.com, to liquidate any current positions and trade all balances. fiat Due to the latest liquidity crisis at the FTX exchange, U.S. dollars
The company claims to have decided to liquidate FTX.com’s holdings due to the “exchange’s default”. Hidden Road Partners, a digital asset brokerage and foreign exchange broker, closed a $50 million financing earlier in August. Participation from Coinbase Ventures and Citadel Securities was also involved.
Just a few days ago, Binance founder and CEO Changpeng Zhao announced previously that the exchange intended to liquidate all its exposure to FTX of about $530 million in FTT tokens as part of Binance’s exit from FTX’s stake last year.
These decisions triggered a FUD feeling in the market, resulting the collapse of FTX.
According to reports, FTX CEO Sam Bankman Fried has told investors that the crypto exchange would need to file bankruptcy if it is unable secure a cash injection. Bloomberg received the information directly from someone with knowledge of the matter.
The cryptocurrency exchange FTX.com’s highly leveraged use funds has created a liquidity crisis that has prompted the industry to consider a number of issues such as fund security and custody.
Bybit co-founder and CEO Ben Zhou said that “The entire sector has a duty and obligation to do better by our customers,”
Coinbase, Bybit and many other crypto exchanges have said that they will not engage in such high-risk activity and guarantee that all customers assets are in one-toone liquidity custody. Users can also withdraw assets at any moment.
Kris Marszalek from Crypto.com stated that public proof of reserves should be shared by crypto platforms. Crypto.com will publish the audited proof.
“This is a crucial time for the whole industry. Transparency is essential, and the safety and security for users and funds remain the priority. It requires a collective and full commitment.” Marszalek said.