Bitcoin investors pulled out $1.5 billion in November
Fearful cryptocurrency investors are withdrawing their money in record numbers after the collapse of FTX.
That’s according to a Sunday (Dec. 11) report from The Wall Street Journal, which says investors withdrew 91,363 bitcoins, worth nearly $1.5 billion, from exchanges including Binance, Kraken and Coinbase. It was the largest bitcoin outflow on record, the report said.
The withdrawals come as bitcoin has fallen 64% this year. They are also the latest example of the ongoing fallout from the collapse of FTX, which has become notorious for its apparent lack of internal controls.
Last week saw the Office of the Comptroller of the Currency (OCC) highlight cryptoassets as a “special topic” in its “Semiannual Risk Perspective for Fall 2022” report.
“This year’s shifts in crypto markets and the associated failures of crypto firms have highlighted several key risks, reinforcing for banks and supervisors the importance of taking a prudent and prudent approach to crypto activities and engagement with crypto-related firms,” the OCC said.
First, the industry’s risk management practices are not mature, the report says, as the sector has been plagued by hacks, outages, fraud, fraud and confusion around ownership rights, custody arrangements and financial representations.
“Most crypto market participants appear to be unprepared for the stress and surprises that have occurred this year, resulting in significant losses for millions of consumers,” the OCC said.
In recent weeks, crypto firms have taken steps to reassure worried investors, as PYMNTS wrote last week.
Companies such as Binance and Crypto.com have sought external auditors to provide proof of asset reports, showing that the business has the assets to cover its liabilities.
In a recent interview with PYMNTS, Saule T. Omarova of Cornell University said that one of the defining flaws in the FTX saga was the lack of “common sense internal controls” as the company apparently tried to operate without a CFO. Its board consisted of just three people, one of whom was former CEO Sam Bankman-Fried.
How consumers pay online with stored credentials
Convenience prompts some consumers to store their payment information with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze the consumer dilemma and reveal how merchants can win over holdouts.
