The CEO of the world’s largest cryptocurrency exchange said the roughly $1 trillion digital asset market is facing a crisis similar to the 2008 financial crash and warned that more companies may go bankrupt in the coming weeks.
As reported by the Financial Times, Changpeng Zhao, founder of Binance, said the full impact of the crisis on rival exchange FTX has yet to be felt. Speaking at a conference in Indonesia, he said the global financial crisis was “probably an exact analogy” to the events of this week.
“With the fall of the FTX, we will see cascading effects,” Zhao said. “Especially for those close to the FTX ecosystem, they will be negatively affected.”
He warned of the impact on crypto lender BlockFi, which was bailed out by FTX earlier this year. BlockFi suspended withdrawals today.
Zhao also questioned a deal that FTX struck to buy assets of another cryptocurrency lender, Voyager, due to insolvency, saying FTX “obviously… won’t have the money” for the $1.4 billion transaction.
However, the Binance chief is confident that the cryptocurrency sector will eventually recover. “The market will heal itself,” he said.
