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Galaxy Digital Reveals $76.8 Million Exposure to FTX Amid Liquidity Crisis

Galaxy Digital disclosed a $76.8 million exposure to FTX, with $47.5 million in the withdrawal process, as FTX halted withdrawals due to a liquidity crisis.
Published on 2022-11-09

Galaxy Digital's Exposure to FTX

Galaxy Digital, a leading blockchain financial services firm, revealed during its quarterly earnings call on November 9 that it had an exposure of $76.8 million to the troubled cryptocurrency exchange FTX. This exposure includes both cash and digital assets. Of this amount, $47.5 million is currently in the process of being withdrawn.

FTX's Liquidity Crisis

The disclosure came a day after FTX announced it had halted all withdrawals. The exchange cited a combination of factors, including a consumer bank run and a significant decline in the value of its native FTX Token (FTT), which it uses as collateral. This perfect storm led to a severe liquidity crisis, forcing FTX to suspend withdrawal services.

Implications for the Blockchain Industry

The situation highlights the vulnerabilities in the blockchain and cryptocurrency sector, particularly when firms hold significant assets on third-party exchanges. Galaxy Digital's exposure underscores the importance of risk management and diversification in the volatile digital asset space.

The liquidity crisis at FTX has sent shockwaves through the industry, raising concerns about the stability of centralized exchanges and the need for greater transparency and oversight. As the situation unfolds, stakeholders are closely monitoring developments to assess the broader impact on the blockchain ecosystem.

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