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FTX liquidity crisis forces crypto hedge funds into rethink

‘Risk management and due diligence will become far more important after the FTX crisis'

Alameda Research, a quantitative crypto trading firm previously led by FTX’s founder Sam Bankman-Fried, had nearly $14.6bn in assets as of 30 June
Alameda Research, a quantitative crypto trading firm previously led by FTX’s founder Sam Bankman-Fried, had nearly $14.6bn in assets as of 30 June Photo: Ting Shen/Getty Images

Crypto hedge funds are changing how they work with exchanges around settlement and asset safeguarding, after a liquidity crunch pushed FTX to the brink of collapse.

FTX rival Binance signed a letter of intent to fully acquire FTX on 8 November. The announcement triggered a crypto sector bloodbath, losing over $100bn in market capitalisation in the following 24 hours, according to CoinMarketCap data.

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