A crypto enthusiast posted on the social media platform Reddit on November 21, 2022, that FTX is nothing compared to Mt. Gox.
"When Mt. Gox collapsed in 2013 it was 70% of global trading volume. FTX was only 10%. FTX is worse on an absolute basis, but on a relative basis, Mt. Gox was much worse. If Bitcoin can survive that it absolutely can survive this."
by in CryptoCurrency
The user named Bladeyy21 made the post in the early hours of the day as an open discussion. Other members of the crypto community on Reddit commented, and many expressed similar sentiments to the user.
One of the crypto enthusiasts commented that a friend reached out and asked if he should be worried about his BTC when FTX crashed, but the user replied saying there is no cause for alarm except if his coin is still in a crypto exchange.
The user emphasized the significance of decentralization, claiming that cryptocurrency exchanges are no better than banks. They are sometimes even worse than traditional banks because they can get away with more crimes under the current system.
Another user stated that MT Gox piqued his interest in cryptocurrency; his extensive research led him to realize that centralized exchanges are not what cryptocurrency is about, even if they aid in the widespread adoption of digital assets and the exchange of crypto for fiat.
However, the crash shows how much CEXes are prone to failure and why decentralization and self-custody are vital.
However, other users do not fully agree with the opinion of Bladeyy21 and other crypto enthusiasts. According to another user, CEXes were very important in the bull run, and their crash could significantly impact cryptocurrencies.
The Mt. Gox incident in 2013 was recorded as the most significant Bitcoin hack ever in the history of cryptocurrencies.
All the siphoned Bitcoin amounted to $840,000 in total. Users who stored BTC were the hardest hit, while the company only lost 100,000 BTC; in US dollars, this equates to 460 million.
The loss was so severe that the platform was unable to recover and declared bankruptcy in 2014. Even though some of the coins were recovered, the users never got a refund.
Before the hack, Mt. Gox was a household name in the crypto industry, handling over 70% of all Bitcoin transactions; when it went bankrupt, over 70% of all BTC in the industry went down the drain with it.
Bladeyy21, who made the post, pointed out the fact that even though the FTX crash is the worst on an absolute basis, the global crypto market only lost 10% of its value, compared to Mt. Gox, where it lost over 70%.
However, the FTX crash is severely affecting the market, as prices have plunged, and some platforms, like Solana and Oxygen Protocol, in which it was heavily invested, are currently in a tight spot and facing an impending crash.
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