FTX’s collapse has significantly dented the confidence of investors in centralized crypto exchanges. Amidst the subsequent financial turmoil and reports about the troubled crypto exchange tapping customer funds to fund risky bets, the golden rule of crypto – “not your keys, not your coins” has taken a center stage in popular discourse once again.
Abdicating control over users’ coins has cost many dearly. As a result, mass withdrawals from exchanges have now been reported.
According to CryptoQuant, over 80,000 BTC have left exchange wallets in the past day. Investors are withdrawing their Bitcoin to store them in places other than an exchange, data showed.
The report stated,
“The last few days were an absolute mess for the crypto-industry. FTX going bankrupt, searching for a bail-out and Binance might jump in to help. Time will tell if that actually materialize. In the meantime, investors have lost trust on central exchanges. This is perfectly visualized on the Exchange Reserves & Exchange Netflow.”
On-chain data also suggested that well over 5 billion stablecoins outflows from exchanges were tracked by CryptoQuant. The figures appear to be the largest since June 15 as the volatility stemming from the FTX drama continued to intensify.
On the other hand, the number of transactions withdrawing stablecoins from exchanges has rocketed above 57,900 from 7,016 just a week prior.
Due to the massive outflows from crypto exchanges, hardware-based cryptocurrency wallet provider Ledger experienced “few scalability challenges” following server outages.
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