Crypto exchange tokens have rebounded from their lows during the FTX bankruptcy and are now reaching new all-time highs in the current bull market.
At present, Binance’s native token, BNB, is trading at $352, marking a 32% increase since November 2022 when FTX’s bankruptcy declaration caused panic in the crypto exchange industry.
Furthermore, BNB is trading even higher than its previous highs in June 2023, when news broke of an investigation by the US Department of Justice (DOJ) and a lawsuit by the US Securities and Exchange Commission (SEC) against the exchange. FTX has since settled with the DOJ for $4.3 billion, but the SEC lawsuit is still ongoing.
Exchange tokens, which are issued by centralized entities, provide users with trading benefits on exchanges. They can also be used for paying gas fees and participating in decentralized finance on blockchains created by centralized exchanges. Additionally, some exchange tokens allow users to engage in the governance activities of the platform.
Meanwhile, OKX exchange’s native token, OKB, has experienced a significant gain of 132% since its FTX lows and a total gain of 3,227% since its launch in May 2019. On January 25, the OKB token suffered a massive flash crash, wiping out nearly $6.5 billion in a matter of minutes before fully recovering and reaching new all-time highs. The flash crash was caused by a brief market sell-off that resulted in multiple leveraged liquidations within the OKX platform. The exchange has compensated affected users through an airdrop.
Similarly, Bitget exchange’s BGB token has surged to all-time highs of $1.03, with a yearly gain of 159%. Last September, the exchange committed a $100 million fund called “EmpowerX” to support blockchain, AI, and Web3 projects. Gracy Chen, the managing director of Bitget, stated at the time that the company anticipates more investments, mergers, and acquisitions as the centralized exchange landscape evolves with changing regulations.
In contrast, FTX’s FTT token has experienced a decline of over 90% compared to its pre-bankruptcy highs. Although the exchange plans to fully reimburse customers, excluding bankruptcy fees, it will not be relaunched.
According to bankruptcy lawyer Andy Dietderich, “No investor is willing to provide the necessary capital for the relaunch of the offshore exchange, and there has been no buyer interested in acquiring the exchange as a going concern. The costs and risks associated with building a viable exchange from what Mr. Bankman-Fried left behind are simply too high.”
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