Investor Trust in Exchange Tokens Sees Resurgence, Overcoming FTX Scandal Shadows
Crypto exchange tokens have shown resilience, rebounding from the lows caused by the FTX scandal and reaching new highs amid the ongoing bullish market.
Investor confidence in these tokens has been restored, with prominent examples such as Binance‘s BNB and OKX’s OKB demonstrating significant gains.
Exchange tokens, issued by centralized entities, offer users various benefits on exchanges, including trading advantages, payment for gas fees, and participation in decentralized finance activities on exchange-created blockchains.
Some tokens also enable users to engage in governance activities on the respective platforms.
BNB Up by 32% Since FTX Scandal
BNB, Binance’s native exchange token, currently trades at $354, marking a 32% increase since November 2022, when FTX’s bankruptcy announcement sent shockwaves through the crypto exchange ecosystem.
Additionally, BNB has surpassed previous highs in June 2023 when news of investigations by the U.S. Department of Justice (DOJ) and a lawsuit by the U.S. Securities and Exchange Commission (SEC) against Binance emerged.
While the DOJ settlement has been reached, the SEC lawsuit remains ongoing.
Likewise, OKB, OKX’s native exchange token, has experienced a remarkable recovery, surging by 132% from its FTX lows and achieving a total gain of 3,227% since its launch in May 2019.
On January 25, the OKB token faced a flash crash that wiped out nearly $6.5 billion within minutes.
However, it swiftly rebounded and reached new all-time highs.
The flash crash was triggered by a brief market sell-off leading to leveraged liquidations on the OKX platform.
The exchange has taken responsibility for the incident and compensated affected users through an airdrop.
Moreover, Bitget exchange’s BGB token has surged to all-time highs of $1.03, boasting a yearly gain of 159%.
Last September, Bitget pledged a $100 million fund called “EmpowerX” to support blockchain, AI, and Web3 projects.
The exchange anticipates increased investments, mergers, and acquisitions as the centralized exchange landscape evolves alongside regulatory changes.
FTX’s FTT Continues to Bleed
In contrast, FTX’s FTT token has experienced a significant decline, losing over 90% of its value compared to its pre-bankruptcy highs.
While FTX aims to fully repay its customers, excluding bankruptcy fees, the exchange itself will not resume operations.
Recently, the exchange sought approval to sell its 8% stake in AI startup Anthropic Holdings.
In a motion filed by FTX’s current CEO, the exchange requested permission to sell the stake and proposed two possible procedures, including an auction or a private sale.
The exchange also requested a shortened period for objections to be raised, with a court hearing scheduled for February 22 to expedite the deliberation process.
The precise price sought for the Anthropic shares has been redacted from the filing, as FTX’s legal team believes public disclosure could hinder the potential to obtain higher offers for the stake.
Earlier this month, the platform filed a motion in a Delaware court to sell its $175 million claim against bankrupt digital financial services firm Genesis Global Capital.
