Amid FTX Contagion, Crypto Traders Now Face Another Massive Risk
FTX Crypto traders News: Even as the crypto market continues to struggle with the FTX contagion, there is a new and added cause of concern for traders. The cryptocurrency prices remain stagnant at the lowest levels in several months following the bloodbath the market saw after FTX collapsed. This also led to increased pressure from regulators on the crypto market. Also, traditional financial players in the insurance sector are also shying away from crypto investments related to FTX.
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FTX Contagion Effect Drags On
In a latest, major insurance companies like Lloyd’s of London are restricting their coverage to clients who have FTX exposure. This could have a cascading effect on the whole crypto market as there is a long way to go before gaining regulatory clarity on insurance policy for crypto assets. Not just crypto traders, but big firms in the industry like exchanges are being denied insurance coverage to at least part of the funds that are linked to the Sam Bankman-Fried company.
According to a latest Reuters report, several “insurers are denying or limiting coverage” to clients with exposure to the bankrupt crypto exchange. This leaves crypto traders and exchanges with the risk of losing insurance cover in the event of cyber hacks, exploits and legal issues.
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