Crypto Exchange Tokens Surge to Record Highs Post-FTX Bankruptcy
Summary:
Cryptocurrency exchange tokens, including those from Binance, OKX, and Bitget, have significantly rebounded from their lows following FTX's bankruptcy, even achieving record highs. Binance's native token, BNB, has risen 32%, while OKX's OKB token has gained 132% from its previous lows. Bitget's BGB token has rallied to an all-time high. Despite the recovery of these tokens, FTX's own token, FTT, has lost over 90% of its value. Future prospects for these exchanges include embracing evolving regulations and compensating users affected by recent market volatility.
Tokens of cryptocurrency exchanges have predominantly bounced back from their lowest points following FTX's bankruptcy, reaching or surpassing previous record highs amid an ongoing bullish market. At the stage of reporting, BNB, the signature token of Binance, is being traded at $352, marking a 32% increase from November 2022. That was when the troubled FTX crypto exchange filed for bankruptcy, creating a wave of fear through the crypto exchange world. Furthermore, BNB is trading above its previous peak seen in June 2023, amid the initial reports of a U.S. Department of Justice (DOJ) investigation and a U.S. Securities and Exchange Commission (SEC) lawsuit. Subsequently, the exchange settled with the DOJ for a hefty $4.3 billion, but the SEC lawsuit is still active. Centralized entities issue Exchange tokens, which allow users to enjoy trading advantages on exchanges, cover gas charges or participate in decentralized finance on the blockchains these centralized exchanges create. Moreover, some also grant users the right to a say in the platform's governance.
Meanwhile, the native OKB token of OKX exchange has recorded a 132% elevation from its FTX lows, boasting an overall rise of 3,227% from its May 2019 launch. On January 25, OKB saw a drastic flash crash that eliminated nearly $6.5 billion within minutes before it entirely recuperated and achieved new record highs. A temporary market sell-off that day initiated various leveraged liquidations in pledged lending, margin trading, and cross-currency transactions on the OKX platform, thereby triggering the flash crash. The exchange has compensated affected users via an airdrop since then.
Simultaneously, the BGB token of Bitget exchange has surged to the topmost heights of $1.03, showing a yearly growth of 159%. Last September, the exchange promised a $100 million fund, titled "EmpowerX," devoted to blockchain, AI, and Web3 projects. Gracy Chen, Bitget's managing director, then remarked that the firm anticipates more investments, partnerships, and takeovers in the upcoming months in line with the evolving regulatory environment around centralized exchanges.
In contrast, FTT, the token of FTX, has plummeted over 90% compared to its value before the bankruptcy. Although the exchange plans to fully reimburse customers, excluding bankruptcy costs, the exchange will not reopen. Andy Dietderich, a bankruptcy lawyer, stated, "No investor is prepared to provide the required capital for the offshore exchange's restart, and no buyer has shown interest in purchasing the exchange under existing circumstances." He added, "The expenses and risks associated with resurrecting a functional exchange from what Mr. Bankman-Fried left behind are simply too significant."
Related: A surge in Hong Kong crypto stocks, OKX planning to invest in L1s: Asia Express.
Published At
2/19/2024 9:00:12 PM
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