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It’s been a tough year for crypto the market, November was particularly difficult for both traders and investors. Even while it was extremely painful for many, the collapse of FTX and the subsequent epidemic that threatens to bring other controlled crypto exchanges down with it may ultimately prove beneficial.
According to data source CryptoQuant, users withdrew a net $3.7 billion worth of Bitcoin and $2.5 billion worth of Ether over the week of Sunday, Nov. 6 to Sunday, Nov. 13.
Over the same time period, they removed many of the biggest stablecoins valued at more than $2 billion, according to CryptoQuant, which monitors data from the majority of significant exchanges.
The collapse of Bahamas-based FTX, which was previously regarded as one of the most reliable names in the industry, has rekindled debate about how loosely regulated cryptocurrency businesses are and what safeguards are in place to carefully supervise clients' assets.
In addition to the hedge fund Three Arrows Capital, the cryptocurrency lender Celsius Network, and the broker Voyager Digital, FTX is the most recent in a long line of significant crypto companies to go under this year.
The controversy began on Sunday, Nov. 6, when Binance's "CZ" tweeted that on selling its FTT tokens. Investors in FTX.com had such a severe panic as a result that they collectively withdrew $430 million in Bitcoin from the three-year-old exchange in just four days.
By November 6, according to statistics from CryptoQuant, the company had more than 20,000 Bitcoin in its possession. By Wednesday, Nov. 9, it had almost completely disappeared as clients left over concerns about FTX's financial stability.
The FTX fiasco had immediate and disastrous repercussions as Bitcoin lender BlockFi stopped platform activities and spread reports that it was about to file for bankruptcy.
A number of businesses, in addition to BlockFi, SALT, and Genesis Global, were left holding the bag as a result of FTX's bankruptcy. Galois Capital, a hedge fund, had as much as $50 million worth of crypto assets stranded on FTX.
The Hong Kong cryptocurrency exchange Hbit's owner, New Huo Technology, has been unable to withdraw $18.1 million in digital assets from FTX and Nigerian Web3 startup Nestcoin also had funds that was stuck on SBF's exchange.