FTX Crisis Sending Alarm Signals
The liquidity crisis of FTX is sending alarm signals to South Korean cryptocurrency exchanges. As of 13:30, Nov. 10, both BTC and ETH dropped more than 10 percent in 24 hours.
South Korean cryptocurrency exchanges’ profits are likely to plunge under the circumstances. This is because their sales are heavily reliant on trading fees. In the five biggest domestic cryptocurrency exchanges, trading fees account for no less than 99 percent of their sales. The crisis of FTX is likely to lead to a decrease in trading volume, which means a decrease in profit on the part of cryptocurrency exchanges.
In fact, the business performance of the five exchanges is already deteriorating rapidly as the market seriously affected by the Terra-Luna crash has been sluggish throughout this year. Dunamu’s valuation loss was 15.3 billion won in the first quarter and surged to 372.5 billion won in the second quarter. Bithumb turned red in the second quarter by posting a net loss of 43.3 billion won.