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A wave of panic: the FTX crash temporarily left Ledger users without crypto

Igor Grigorchenko

News editor

Nov 11, 2022 at 06:51

Owners of Ledger’s popular hardware wallets for securely storing digital assets offline ran into problems connecting, authenticating and processing their deposits yesterday. All of this happened amid problems with the FTX crash, causing another wave of panic. The Ledger creators confirmed the temporary glitches. FTX finances are being blocked more and more often.

Users lost access to their wallets

According to CTO Charles Guillemet, Ledger’s server was overloaded with requests from wallet holders on Thursday due to heavy use of the Ledger Live app.

This timed in with the peak of cryptocurrency sales on a negative news background due to the crisis situation of the FTX exchange. The company did not disclose plans to fix such problems in the future, admitting that Ledger has problems with the scalability of processing requests.

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The server load did not affect the security of deposit storage in any way. On the other hand, cold wallets are purchased for long-term secure storage of digital currencies and unexpected failure, and unavailability of funds, especially against the background of such negative events, logically causes a panic attack among users of this popular service (among which there are many large investors).

The problem turned out to be temporary and all was safely resolved.

There are still some affected

However, before you close this page in peace, we hasten to inform you that Ledger has blocked some of its users after all.

Shortly before this service disruption, Ledger’s support team announced the temporary suspension of FTX and FTX.US swaps on Ledger Live, which were launched back in 2021. Similar lockouts followed from Tether, which froze all available FTX assets in USDT.

But the most painful blocking followed from the Bahamas Securities Commission, which issued an order to freeze all bank assets of cryptocurrency exchange FTX amid liquidity problems. The regulator said FTX’s assets were misused and managed or transferred to Alameda Research. 

The commission considers these actions of the exchange potentially illegal, and the only proper solution in this situation is to subject FTX Digital Markets to preliminary liquidation in order to freeze assets and stabilize the situation.

How can I make money on this?

Given all of the above, the financial activity of FTX is frozen at virtually all levels. Thus, the bankruptcy of the exchange is seen as inevitable. Any connection or dependence on the exchange now causes investors to panic.

So, in a situation where nothing is clear, the best thing to do is to refrain from all assets related to this crypto exchange (FTT, SOL, APT), which will become toxic during all the proceedings. At this link you can find many other projects in which FTX/Alameda managed to invest (or gain control), whose future is still not quite clear.

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