Exchange tokens like BNB, OKB, and BGB surge to new highs despite past challenges. FTT struggles post-bankruptcy. Insights on market dynamics and regulatory impacts.
Tokens associated with cryptocurrency exchanges have largely rebounded from their lows following the bankruptcy of FTX and have either recovered or reached new peaks amidst the ongoing bullish trend.
Presently, Binance's native token, BNB, is trading at $352, marking a 32% increase since November 2022. This surge comes after FTX, a troubled cryptocurrency exchange, filed for bankruptcy, causing widespread panic throughout the crypto exchange sector.
Moreover, BNB's current trading price surpasses its previous highs in June 2023, despite the unsettling news of an investigation by the U.S. Department of Justice (DOJ) and an SEC lawsuit against the exchange. The DOJ investigation concluded with a $4.3 billion settlement, while the SEC lawsuit remains ongoing.
Exchange tokens, which are issued by centralized entities, offer users various trading advantages on exchanges. Additionally, they can be utilized for paying gas fees and participating in decentralized finance activities on blockchains established by centralized exchanges. Some exchange tokens even allow users to engage in the governance of the platform.
Meanwhile, OKX exchange's native token OKB has surged by 132% from its FTX lows and has witnessed an overall gain of 3,227% since its launch in May 2019. On January 25, the OKB token experienced a significant flash crash, resulting in a loss of nearly $6.5 billion within minutes before fully recovering and hitting new record highs. The flash crash was triggered by a brief market sell-off, leading to numerous leveraged liquidations in pledged lending, margin trading, and cross-currency transactions within the OKX platform. The exchange subsequently compensated affected users through an airdrop.
Similarly, Bitget exchange's BGB token has surged to all-time highs of $1.03, achieving a yearly gain of 159%. Last September, the exchange announced a $100 million fund named "EmpowerX," dedicated to blockchain, AI, and Web3 projects. Gracy Chen, the managing director of Bitget, expressed expectations for increased investments, mergers, and acquisitions in the centralized exchange landscape as regulatory changes unfold.
As expected, FTX's FTT token has plummeted by over 90% compared to its pre-bankruptcy peak. Despite the exchange's commitment to fully reimburse customers, excluding bankruptcy fees, there are no plans to relaunch the exchange itself.
“No investor is willing to allocate the necessary capital to revive the offshore exchange, nor has there been any interest from potential buyers," stated bankruptcy lawyer Andy Dietderich. “The costs and risks associated with reviving a viable exchange from the remnants left by Mr. Bankman-Fried are simply too prohibitive.”
Related: Hong Kong crypto stocks soar, OKX to invest in L1s: Asia Express