The crypto crash arrived in Argentina: due to the FTX crisis, a local platform suspended fund withdrawals

FTX was Quantia’s “service provider”. REUTERS/Dado Ruvic/Illustration

Quantia, an Argentine cryptocurrency exchange, suspended withdrawals from its clients and became a new victim of the fall of the FTX platform, which admitted bankruptcy last week, after a rescue attempt by Binance failed. , its main competitor worldwide.

In a message sent to its clients, Quantia admitted its situation: “Given the lack of information on the current state of FTX we are not in a position to operate normally. Until there is more clarity, we will limit the activity of our platform suspending withdrawals momentarily. At the moment we request not to make deposits until the service is fully normalized.

“This is a problem that affects the entire crypto industry as a whole and our absolute priority will continue to be protecting our customers,” concluded the letter, which is signed by michael schweizerCEO and founder of the company.

“FTX, in addition to being a service provider for Quantia and thousands of companies in the ecosystem, is an audited company that until now was working together with the United States regulators in the development of a Federal License” in that country, he added. .

“In less than 48 hours, FTX is being investigated by the United States Department of Justice and the Securities and Exchange Commission (SEC) and has filed for bankruptcy,” Quantia explained to his clients.

According to the Quantia website, founded in 2013, the company manages assets for USD 500 million dollars and has an average of USD 30 million monthly operations.

In addition to the possibility of selling and buying cryptocurrencies, Quantia offers high interests for leaving them deposited. Those returns were 4 or 5% per year for Bitcoin and Ethereum, but in the case of stablecoins, digital currencies tied to the dollar, they reached 8 or 9% per year. This is the case of USDT, USDC or DAI, which paid yields of that amount.

“Cryptocurrencies have a huge advantage over any other currency issued by a central bank that has a discretionary monetary policy that depends on the power of the day,” Schweizer said in a recent interview with The chronicler.

Consulted about the strong insertion of the crypto world in Argentina, he explained that through its use “digital dollars can be bought in a context where almost no citizen can access to buy official dollars. Consequently, acquiring USDT, USDC, DAI is an option because they are crypto-dollars that allow you to hedge against inflation in pesos and, secondly, generate rates in crypto-dollars to protect yourself from the 8% annual inflation that the dollar has.”

Schweizer pointed out that, in his opinion, the drop in the price of the main cryptocurrency would be coming to an end: “Bitcoin develops four-year cycles. Therefore, we expected this year to be contractive. However, given the degree of institutional investment that the market had achieved, we imagined that the drop would be around 40% because as the market is larger and has more liquidity, sudden changes lessen. The previous top was November 2021, so the floor may be very close to start a new bullish cycle.”

The sudden collapse of FTX, with $9 billion in liabilities and only $900 million in assets on its balance sheet, sent crypto market prices plummeting last week. The platform filed bankruptcy proceedings on Friday, along with its subsidiaries, after learning of a failed rescue plan by Binance.

His fall is already being investigated by federal prosecutors in Manhattan, Bloomberg reported. The US Attorney’s Office for the Southern District of New York will review the circumstances surrounding FTX’s disappearance. FTX co-founder Sam Bankman-Fried was also interviewed by police and regulators in the Bahamas, where the company is registered, as the country’s authorities investigate whether there was any criminal conduct.

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