The recent implosion of one of the world’s largest cryptocurrency exchanges created a seismic shudder throughout the market. The impact of this collapse was felt in every corner of the cryptocurrency market, and it is still reeling a few weeks later. Websites that use cryptocurrency as a currency medium have felt the full impact of this hit, as some altcoins have nearly halved in price.
FTX isn’t the first cryptocurrency exchange to disappear. However, the size of the business and the level of wealth involved have caused further concern for companies about how safe their money is on cryptocurrency exchanges.
What Is Crypto Gambling?
Gambling is a market that has existed, in some capacity, for centuries. It is an industry that has continually moved with the times and evolved into a huge industry. The concept of crypto gambling is still a niche market within this huge, highly profitable and lucrative sector.
There are several positives to gambling crypto which gamblers have begun to recognize. One of the main positives is the added security when using cryptocurrency to gamble. As crypto gambling providers use direct peer-to-peer transactions with their customers and the transaction is verified on the blockchain, it negates the need for any centralized currency to exchange hands.
A cryptocurrency wallet is a highly secure place to store your digital asset. Unless you provide your wallet keys to a third party acting in bad faith, your wallet is essentially impenetrable.
What Happened In The FTX Scandal?
FTX was a large cryptocurrency exchange that was operating out of the Bahamas. The head of the company, Sam Bankman-Fried, was one of the youngest billionaires in the world due to several highly successful cryptocurrency trades he has executed in the last few years.
He used these profits to set up FTX in the Bahamas. However, the company has come under massive scrutiny for using customer money to offset loans. The catastrophic mishandling of the company’s finances came to a head in the last few weeks. This was down to many customers wanting to withdraw their funds. Customers became concerned amid increasing negative scrutiny of how the business was being handled. Once this fear and uncertainty spread, it was clear that the FTX business model was completely unfit for purpose.
Due to the mass withdrawal requests and the exchange being overleveraged, the native token collapsed by 90% and the exchange entered liquidation. It is one of the biggest and most notable mismanagements of funds of all time, and the consequences will continue to rumble on for the next few years.
How Will It Affect Crypto Gambling Websites?
Suppose you use a crypto gambling website that only allows you to deposit cryptocurrency. In that case, their bottom line will have also taken a sizeable hit due to this recent market correction. However, many cryptocurrency casinos will have some centralized currency holdings that help stabilize their business model in the event of a serious crypto crash.
Essentially, your cryptocurrency is worth less due to the market crash caused by the FTX scandal. It is too early to tell whether or not this crash will lead to tougher regulation in the digital asset space. There have been several calls by high-ranking politicians and legislative bodies to try and protect investors from such a catastrophic event from taking place again.
If it does lead to tougher regulation, it will likely result in fresh legislation regarding how cryptocurrencies are bought, sold and used online. This could lead to a revamp in crypto gambling companies, which could cause the market to increase or decrease in value.
Disclaimer: Gambling involves an element of financial risk and may be addictive. Please play responsibly and at your own risk. This post contains material that may or may not be legal in your country. Please play/not play subject to applicable law.
