FTX Crash: Indonesia Bars Exchanges From Trading Bankrupt Firm’s Tokens

The recent FTX crash has led to an unprecedented meltdown in crypto prices.

Indonesia on Thursday passed an order asking crypto exchanges in the country to stop trading FTX tokens after the embattled company’s bankruptcy filing in a US Court, said the sector's regulator in a statement, as reported by Reuters. The order is effective since November 14, as per Indonesia's Commodity Futures Trading Regulator. The development comes after the FTX crypto exchange went bankrupt and filed for Chapter 11 bankruptcy protection in the United States on November 11. A big collapse pushed the company into bankruptcy, which left everyone worrying in the industry.
 
The US bankruptcy proceedings involve several FTX Group companies with over 1 million creditors.
 
FTX was founded in May 2019 by former Wall Street trader Sam Bankman-Fried and ex-Google employee Gary Wang, who was also an owner of the FTX.com cryptocurrency exchange.

FTX’s sudden failure also caused the suspension of customer redemptions for its lending business by a major crypto player Genesis Global Capital earlier this month.

Venture capital firm Digital Currency Group, the parent company of Genesis, said the decision to suspend redemptions "was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion."
 
Genesis had about $2.8 billion in total active loans at the end of the third quarter this year. In the year 2021, it had extended $130.6 billion in crypto loans and traded $116.5 billion in assets.
 
It said the current suspension "has no impact on the business operations of DCG and our other wholly owned subsidiaries."

Its co-founder, Sam Bankman-Fried, is currently facing legal proceedings in the US court.
 
So far, the traders have pulled around $6 billion from the platform in just three days. Binance, a competitor, has also backed out of a rescue deal.
 
Media reports say that Bankman-Fried "has no ongoing role" at the company, which is currently being investigated by agencies in different countries across the world after its failure.
 
Lawmakers in the US Congress earlier said they were planning to initiate hearings on the FTC before the year-end. The New York Department of Financial Services is currently monitoring the situation in which Genesis suspended its customer redemption.
 
US Treasury Secretary Janet Yellen said more effective oversight is needed on the crypto markets to address all such risks.

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