Solana Feels Ripples of FTX Collapse, Crypto.com Halts Solana, USDC and USDT Withdrawals and Deposits
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The recent collapse of the Binance and FTX deal has sent ripples across the cryptocurrency market. The entire crypto market has witnessed the rough market since the beginning of the year.
The crash of FTX and Alameda research has sent the market into a frenzy. Some investors are apparently demanding back tokens that they had “staked” or put into the blockchain’s underlying security protocol.
The state of Alameda Research and FTX earlier this week led crypto market analysts to believe that FTX would sell a portion of SOL tokens to raise liquidity amid a liquidity crisis at FTX. The fear caused SOL prices to fall.
However, there has been a shift in the dynamics of the situation as validators of Solana providing security to the blockchain are set to unlock ‘Epoch 370’ i.e. almost $800 million worth of SOL inventory in less than 10 hours.
The time period for stake rewards that are earned and issued is called “Epoch” on the Solana blockchain. The process takes about two days as validators lock the stake onto the blockchain. The validators have the right to unlock the stake after the period is over.
Cryptocurrency exchange, Crypto.com has temporarily halted the flow of two top SOL ecosystem stablecoins as the FTX saga continues to drag on.
The cryptocurrency exchange has cited recent industry events in an email to users to stop the flow of tokens. “The suspension of deposits and withdrawals of USDC and USDT on the Solana blockchain in the Crypto.com app and exchange is effective immediately,” the email said.
The email also said that deposits of other stablecoins, including Ethereum and Cronos, would not be affected.
Considered as the active competitor to Ethereum, Solana is a smart contract platform that offers low fees and high speeds. Solana also hosts a number of DeFi apps. However, a large portion of the total supply is controlled by Sam Bankman-Fried’s FTX and Alameda Research trading firm, which has led to Solana’s gloomy state in the crypto market as of Wednesday.
SOL tokens have taken a plunge of about 42 percent as a result of FTX’s implosion. The current price is about 92 percent below the price it was trading at a year ago.