What does a newcomer need to know about historical events in the crypto market?
Exchange bankruptcies are a significant aspect in the world of finance, particularly in the crypto market. Such events occur due to poor risk management, unfavorable market conditions, or internal issues within the exchange itself. One example is the bankruptcy of the Mt. Gox crypto exchange in 2014 due to the loss of a significant amount of BTC after a hacking attack. In 2022, the bearish market trend created many problems, especially for FTX, one of the largest crypto exchanges. The company was forced to declare bankruptcy in November 2022 after facing significant difficulties. To avoid losing all your assets, it’s better to diversify them between exchanges and individual wallets that only you have access to. Diversification is a crucial aspect of security; it’s not advisable to keep everything on a crypto exchange since, as practice shows, even top exchanges can go bankrupt or be hacked.
Additionally, the imposition of restrictions on crypto markets is a regulatory response to risks for investors and financial stability. Regulation may concern the security of user funds, transparency of trades, and compliance with standards. While these measures aim to protect market participants, they can also influence trading dynamics and liquidity.
Account freezes on exchanges are quite a common practice. This is related to ensuring security, compliance with legislation, and platform rules. Such freezes often occur due to interactions with platforms and addresses associated with the darknet.