John Gould, a 45-year-old software developer in Birmingham, Alabama, had about $2,000 in his Voyager account, mostly in altcoins, when the platform froze withdrawals. When FTX first announced it would acquire Voyager’s assets, he was optimistic he would be able to cash out, but he doesn’t think that will happen now.
“This is a like domino effect,” he said. “It’s definitely shaken my faith in exchanges.”
Some retail traders who plan to keep investing in crypto say they no longer trust the exchanges and are moving their tokens to offline wallets.
Travis Woo in Hawaii pulled his crypto off FTX on Sunday when he heard rumors of trouble brewing. He had watched Voyager and Celsius go down and realized he had to get his funds out as soon as possible. The 32-year-old full-time trader had about $25,000 worth of stablecoins on FTX that he’s now storing on a ledger.
“This is probably the worst thing to ever happen to crypto,” Woo said. “This is just like a nail in the coffin. I don't think it’s safe to store money on exchanges at all, especially after this.”
That’s also how Jonathan Wallace in Tupelo, Mississippi, feels. The 41-year-old who owns a small insurance agency had just moved $1,500 in Bitcoin onto FTX a few weeks ago, enticed by the prospect of earning 8% annual percentage yield on his assets. He told all his friends to invest with FTX — “and then it just crashed,” he said.
Wallace was able to withdraw his money as of Tuesday night but is now considering abandoning crypto trading altogether.
“This is a big turnoff,” he said. “As a very long-term investment it may pay off, but I probably won’t mess with it as much. This is going to be a wakeup call for a lot of people.”
This article was provided by Bloomberg News.