Crypto exchange tokens have rebounded strongly from the FTX bankruptcy crisis and are now either recovering or reaching new all-time highs in the current bull market.
As of now, Binance’s native token, BNB, is trading at $352, marking a 32% increase since November 2022 when FTX’s bankruptcy announcement caused panic in the crypto exchange ecosystem.
Furthermore, BNB is trading above its previous highs in June 2023, when news of an ongoing investigation by the US Department of Justice (DOJ) and a lawsuit from the US Securities and Exchange Commission (SEC) against the exchange came to light. The exchange has since settled with the DOJ for $4.3 billion, while the SEC lawsuit is still ongoing.
Exchange tokens, which are issued by centralized entities, offer users trading benefits on exchanges and can be used for gas fees and decentralized finance on centralized exchange blockchains. Some exchange tokens also enable users to participate in the governance activities of the platform.
Meanwhile, OKX exchange’s native token OKB has experienced a gain of 132% from its FTX lows and a total gain of 3,227% since its launch in May 2019. On January 25, the OKB token suffered a significant flash crash, wiping out nearly $6.5 billion within minutes before fully recovering and reaching new all-time highs. The flash crash was caused by a brief market sell-off that led to multiple leveraged liquidations in pledged lending, margin trading, and cross-currency transactions on the OKX platform. The exchange has compensated affected users through an airdrop.
Similarly, Bitget exchange’s BGB token has surged to all-time highs of $1.03, with a yearly gain of 159%. Last September, the exchange announced a $100 million fund called “EmpowerX,” dedicated to blockchain, AI, and Web3 projects. Gracy Chen, the managing director of Bitget, stated at the time that the company expects more investments, mergers, and acquisitions in the coming months as the centralized exchange landscape evolves with regulatory changes.
Not surprisingly, FTX’s FTT token has experienced a decline of over 90% compared to its pre-bankruptcy highs. Although the exchange plans to fully repay customers, excluding bankruptcy fees, it will not resume operations.
Bankruptcy lawyer Andy Dietderich explained, “No investor is willing to provide the necessary capital for the restart of the offshore exchange, and there is no buyer for the exchange as a going concern. The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left behind are simply too high.”
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