With this being the second week since the FTX debacle, cryptocurrency investors can expect things to get worse before they get better. However, the two market leaders, Bitcoin and Ethereum, no longer seem to be in free fall.

Bitcoin (BTC), the largest cryptocurrency by market capitalization, is down just 1.3% over the past week and is trading at $16,582. Ethereum (ETH), the second cryptocurrency, has lost about 2.7% of its value and is trading at $1,176 this Sunday (20).

Both appeared to rebound on Tuesday (15), after new data from the latest PPI (Producer Price Index) report from the US Department of Labor showed a decline in the cost of goods, excluding food and energy. Many interpreted this as a sign that US inflation might finally be calming down, which would give the Federal Reserve some incentive to relax its tight fiscal policies. Stocks also rallied on the news.

Several leading cryptocurrencies have dropped in value between 5% and 10% this week, including Cardano (ADA), Polygon (MATIC) and popular memecoins Dogecoin (DOGE) and Shiba Inu (SHIB).

The biggest loser among the top twenty cryptocurrencies by market capitalization was Solana (SOL), which dropped 12% to $12.87. FTX was one of Solana’s early sponsors and the entire Solana ecosystem was affected by the implosion; the blast radius included layoffs in the Solana NFT Metaplex protocol.

The full extent of the Solana network’s ties to Sam Bankman-Fried’s multibillion-dollar cryptocurrency empire came to light this week, along with statements of exposure to FTX by several other industry-leading companies.

FTX contagion spreads

As prices stabilized this week, there were a series of industry revelations as companies came forward to declare the extent of their exposure to the bankrupt FTX.

On Monday (14), crypto lender BlockFi denied claims that most of its assets were linked to FTX, but told customers that withdrawals will remain on pause, citing “significant exposure” to the collapsing exchange.

BlockFi suspended customer withdrawals last week. The company is also considering filing for Chapter 11 bankruptcy, the Decrypt report confirmed, and is likely facing imminent layoffs.

Crypto hedge fund Ikigai confessed to having a “vast majority” of its total assets tied to FTX, in a tweet from founder Travis Kling. Kling also apologized for investing client funds in FTX and for “actively supporting” it.

The Solana Foundation published a blog post revealing that it had $1 million in cash or equivalent assets locked up in FTX. In addition, the foundation owns 3.24 million common shares of FTX Trading LTD, 3.43 million FTT tokens and 134.54 million SRM tokens of decentralized exchange Serum. Bankman-Fried co-founded Solana-based DEX in 2020.

The Foundation’s disclosure also clarified the extent to which Bankman-Fried had invested in the network’s token. FTX and Alameda together purchased 50.5 million SOL, currently worth US$666 million.

On Tuesday (15), crypto-centric investment firm Sino Global revealed in an official statement that it had “seven-figure” exposure to FTX but continues to operate as normal.

Crypto exchange Liquid Global on Tuesday froze all withdrawals, including fiat, “in compliance with the requirements of the voluntary process of Chapter 11 in the United States.” Liquid Group and all of its subsidiaries, including Japan’s Quoine Corporation and Quoine Pte. in Singapore, were acquired by FTX Trading Ltd in an undisclosed deal earlier this year.

Circle, issuer of USDC stablecoin, confessed in a regulatory filing that the “small equity” position in FTX that CEO Jeremy Allaire alluded to immediately after the FTX collapse totaled an investment of $10.6 million. The filing said Circle expects its financial performance to be “substantially lower” than projections made last February.

On Wednesday morning, leading crypto exchange Genesis announced to clients that it would halt withdrawals from its lending arm, citing “unprecedented market turmoil” from the FTX bankruptcy. Just a week earlier, the company tweeted: “Our operating capital and net positions in FTX are not relevant to our business. The circumstances surrounding FTX have not prevented our commercial franchise from fully functioning.”

Even blockchain analytics firm Chainalysis, in documents filed with the bankruptcy court in Delaware, was identified as a creditor to FTX and has money owed in the bankruptcy proceedings.

*Translated with permission from decrypt🇧🇷

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