Cryptocurrency investors have been hit with a wave of bad news this week as well. Looks like the pain is not going to end soon, only going to get worse. Yesterday, BlockiFi officially filed for section 11 bankruptcy as per court documents. Currently, it has over 100k creditors and owes more than $1 Billion to the top ones. The cash on hand is only $265 million.
Even after FTX's downfall, over 100k people did not take their money out of the system. There was ample time and warnings to get out yet many of them chose not to or didn't care enough. Proof of reserves??? Self Custody??? It's sad to see so many folks losing money overnight again and again. That's why I have limited my activity on exchanges. Haven't transferred any money to them in months.
Another twist to the story is that BlockFi is suing SBF to seize his shares in Robinhood. As per their claim, these shares worth $575 million were promised as contingency funds, as reported by Financial times. As per the obligation, SBF has to send those funds to BlockFi which obviously he didn't.
What will happen to the 7.42% shares of Robinhood? Who will finally own them? Guess we will have to wait to find out. The reality is, nobody is going to actually win in this fight or go to jail.
Blockchain Technology was made to give all the power back to its users. With crypto, you can choose to own your funds. The current market is red because users' funds have been consumed by other parties directly or indirectly. In FTX's case, the money was used for gambling and giving away charities to political parties. Don't trust anyone with your keys. You must take custody and take charge of your funds.
I get that it's convenient to use crypto exchanges like banks but both of them cannot be trusted. They are not fit for storing your money because you don't any of it. The amount you see in your wallets/accounts is just a number in their database which is owned and controlled by one single party or group. A CEX (Centralized Exchange) may be secure, but that doesn't mean it's 100% safe from hackers or foul-play. At the end of the day, the entity controlling it can be corrupted.
The best solution is to get a hardware wallet and have a peaceful sleep every night. Put less than 5% of your crypto worth on exchanges or any other lending platform. What do you guys think? Comment below!
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Not financial advice. For infotainment purposes only.
