Kevin O’Leary, one of the famous billionaires in the cryptocurrency space, pointed out that some accounts may face forced liquidation in the coming days. Also, the CEO of Japanese cryptocurrency exchange BitFlyer thinks we will see a wider decline. Here are the details…
Kevin O’Leary: We have zero FTX balance
As cryptokoin.com reported, the shock waves of the FTX crash spread across the entire crypto industry. More than $200 billion was lost from the crypto space in a week as the second largest cryptocurrency exchange crashed. Shark Tank investor Kevin O’Leary says many of his investments have been hit by the recent FTX crash. O’Leary said in a new interview with Crypto Banter that his FTX account balances dropped to zero when he checked on Monday morning.
In his company, he explained that they make a market-based valuation every 12 hours. He said that according to their pricing on Monday morning, they saw their investment in FTX International as zero. He then stated that his investments in FTX US were also zero. He explained that in general he and his investment company had a rough day and had been hit hard.
O’Leary expects forced liquidation in coming days
O’Leary; explained that it has a policy that enforces the discipline of diversification both in its investment position in assets and in institutions. That’s why he said they don’t keep all their cryptocurrencies in FTX. He explained that his biggest concern now is where to put his cryptocurrencies. O’Leary says the damage from breaking FTX is not over yet. He predicts that more dominoes will fall in the coming days or weeks. O’Leary uses the following expressions:
Yeah, I think this is the bottom. But I think the ‘need the rest of the pieces’ thing should end there. Because the cones keep falling from the pine tree. Many forced liquidations are coming in the next 10 days. I have discussed the timing of re-take positions, and according to our auditors, we will take it as a tax loss, no doubt. We will not re-create our positions until after 31 days. Because this is the first year that the IRS and other tax regulators have treated cryptos like stocks. So I think there will be a lot of sales between now and mid-December.
BitFlyer CEO: ‘Lehman shock’ could wreak greater havoc for cryptocurrencies
Yuzo Kano, CEO and co-founder of major Japanese crypto exchange BitFlyer, described the FTX crash as a “Lehman shock” for the crypto industry. Yuzo believes that the collapse of FTX could spread like an epidemic, causing more companies to go bankrupt. We’ve seen crypto lending giants like BlockFi stop withdrawals due to the FTX crisis. Another crypto lender, Salt, paused deposits and withdrawals, saying the FTX collapse had impacted their business.
The bankruptcy of Lehman Brothers in 2008 spread to the entire banking industry, causing a global recession. With the FTX crisis, bitFlyer CEO expects a similar situation in the crypto space. Yuzo Kano said that the Financial Services Agency (FCA) has implemented a double-layered oversight. He also praised the regulatory system in Japan. He pointed out that this provides more protection for consumers.
Yuno: Japan can be followed on cryptocurrencies
“I think regulation is very important,” Yuno said. He even announced that other regulators could follow Japan. He also said that there should be rules where crypto exchanges manage clients’ assets separately from their own. He confirmed that BitFlyer has absolutely no affiliation with FTX. Therefore, the crash “has no effect” on the Japanese stock market.
BitFlyer CEO isn’t the only one comparing this to the Lehman Brothers thing. Earlier, Binance CEO Changpeng Zhao also compared it to the 2008 financial crisis and said that it will take some time for the industry to recover from it. He even pointed to the possibility of this event taking the industry back a few years. CZ also called for establishing global standards to prevent such incidents in the future.
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