FTX bankruptcy freezes millions worth of crypto company funds

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The FTX bankruptcy is hurting several companies in the space. Between Nov. 11 to 14, three crypto companies announced large losses, with one of them having to lay off workers to deal with the crisis.

New Huo Technology, the owner of the Hong Kong-based crypto platform Hbit Limitedon Nov. 14 it failed to withdraw $18.1 million worth of cryptocurrency before FTX stopped processing withdrawals.

$13.2 million of this loss are digital assets owned by Hbit users with the company saying it would continue to take steps to “withdraw the cryptocurrency as soon as possible,” bit admitted due to FTX’s bankruptcy filings the crypto “may not [be] able to be withdrawn from FTX.” According to the announcement, Li Lin, the controlling shareholder of the company and founder of the Huobi crypto exchange, agreed to loan up to $14 million to the company for it to use in processing withdrawals. However, the company does not yet know what the financial impact of FTX’s bankruptcy will be if it is never able to withdraw the funds.

Nigerian Web3 startup Nestcoin also announced it failed to withdraw funds from FTX with the company’s CEO, Yele Bademosi, posting to Twitter on Nov. 14 a letter previously shared with investors. The letter detailed that Nestcoin will lay off workers “as we held our assets at FTX to manage our operational expenses” and it no longer has the funds to pay some staff.

 

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