FTX Custodied 95% of Oxygen Protocol’s Ecosystem Tokens

On November 15, 2022, Oxygen Network expressed its shock over what happened to the FTX exchange in recent times.

1/ The MAPS and Oxygen teams are shocked by events relating to FTX Group’s bankruptcy proceedings.

— Oxygen – Decentralized Prime Brokerage (@Oxygen_protocol) November 15, 2022

They made a series of reports on their Twitter page in the late hours of the day, stating how the protocol would, in a way, be affected by the crash.

FTX, one of the industry’s largest cryptocurrency exchanges, declared bankruptcy on November 11 due to insufficient liquidity and mismanagement of funds. 

The platform also fell victim to a cyber attack by an anonymous hacker, who siphoned about $600 million, draining its reserve. 

Oxygen, in their tweet, states that even though FTX is not an equity shareholder in their organization, they still hold a large amount of their token; also, they are in the custody of over 95% of all oxy tokens.

This means, in effect, that all their tokens have gone down the drain with the FTX crash, most of which are customers’ funds. 

The Oxygen Protocol, a hub for DeFi activities like borrowing and lending, staking, yield farming, and leverage trading, was founded in 2020.

Victor Mangazeev and Alex Grebnev developed it. Both men have a wealth of experience and have worked with several giants throughout their careers before founding Oxygen Protocol.

Mangazeev was a tech enthusiast and entrepreneur who served as a chief information officer for several tech companies. At the same time, Alex has 16 years of experience in investment banking and has worked for firms like Merrill Lynch and Goldman Sach.

It was built on the Solana blockchain and powered by Serum DEX, and it boasts investors like JP Morgan, Genesis Capital, FTX, and its sister platform, Alameda Research.

Oxy is the native token of the platform, and it powers all its activities. Currently, it’s worth $0.196, a 4.47% decrease in the last 24 hours.

It has lost over 99% of its all-time high of $4.14 and continues to lose value, partly because of the bear market and mainly because FTX, the sole custodian holding the lion’s share of all Oxy tokens, has gone bankrupt.

Currently, Oxygen has said it will do its best to stay afloat during these turbulent times and keep the platform from crashing.

But as it is, they are flying solo, relying on the information disclosed to the general public about what is in stock for investors and the 100,000 users who still have funds on FTX.

Since FTX’s bankruptcy, there have been several developments, as auditors who came to inspect and collect the remaining funds discovered many new things. Therefore, no one can say if all those creditors can get even a fraction of their funds on the exchange.

But we await further developments in the coming weeks and months, which will shape the final destination of the whole saga.