There was once a multi-billionaire who lost his fortune overnight: Sam Bankman-Fried (30) went bankrupt. Until recently, the US crypto entrepreneur with curly hair and short pants was still seen as a child prodigy. It is now clear that “SBM” has shuffled billions of dollars and speculated in the process. Last week, the crypto trading center filed for bankruptcy for FTX. It went up to $50 billion.
FTX bankruptcy will push other companies into the abyss. “There is a threat of a domino effect, I expect hundreds of companies to go bankrupt,” says Swiss crypto entrepreneur Olga Feldmeier, 44. There is already talk of the “Lehman moment” in the industry, based on the bankruptcy of US investment bank Lehman Brothers in 2008, following the financial crisis that stumbled across other financial institutions.
Cryptos are hot potatoes
Feldmeier assured that his company, the crypto trading platform Smart Valor, was not disclosed. Smart Valor did not cooperate with FTX. But: “We had big growth plans and wanted to hire a lot of people,” says Feldmeier. Now they’re gone. There is no threat of layoffs in Smart Valor, but experts predict that the crypto industry will slow down drastically with the collapse of FTX.
For example, banks that are about to get into the crypto business with the help of specialized companies like Feldmeiers will now keep their hands off it. “Investors are restless,” says fintech and crypto expert Rino Borini (49). But Zug is not expecting a wave of bankruptcies in the crypto valley. “Smaller start-ups can get in trouble as a result, but it’s not all about the industry.”
There is a certain gallows humor among crypto entrepreneurs. It’s not the first bad news in recent weeks, it’s said in chats. For example, the stable coin that cost countless people’s fortunes was the downfall of Terra. Or the fact that Bitcoin has lost more than 60 percent of its value since the beginning of the year.
Switzerland with a global trump card
“Ultimately, things can only get better now,” says Smart Valor boss Olga Feldmeier. It sounds sarcastic, but seriously. Because the FTX crash also holds good things for Swiss crypto companies. The industry in this country is more regulated than, for example, in the Bahamas, where Sam Bankman-Frieds FTX is located.
“The fact that Swiss companies have valued security from the very beginning has now become a global trump card to be played,” predicts crypto expert Borini.
Olga Feldmeier also expects to emerge as the winner of the FTX crash in the long run. Shares of Smart Valor are up more than 10 percent from last week. For example, it contrasts strongly with Bitcoin, which has lost more than 20 percent over the same period.
“For years, people only looked at where wages were lowest,” says Feldmeier. “Now he’s taking revenge.”
Before Swiss crypto companies can play their cards – security, transparency and stability – they also have to contend with the damage done to their image by the FTX bankruptcy. It will likely take at least half a year for the industry to recover. Until then, the tone in the Swiss Crypto Valley will be a little quieter for once.