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Jason Urban, head of trading desk Galaxy Digital, recently spoke to Forbes about the company’s experience with trading platform FTX, which collapsed in November last year.
At the time, CEO Mike Novogratz said that Galaxy had around $76 million of crypto locked up on the platform. When asked if the company could recover the funds, Urban stated that the company was able to get most of their balance, but they were blocked at the last minute.
No One Sees The FTX Collapse Coming
Urban went on to explain that Galaxy Digital has an extensive exchange risk committee and goes through a thorough vetting process, questioning everything from law to custody. Despite their due diligence efforts in the crypto market, fraud is still a risk. He stated that FTX is not the highest scoring platform on their test list, but is in the upper echelon. Jason Urban adds that when someone is pulling money out the back door, there’s nothing you can do.
When asked if the FTX collapse and other bankruptcies throughout the year have forced Galaxy Digital to change their approach to risk management, Urban stated that the company has a number of methods. Some of these include a minimum annual checkup and proactive action to respond to rumors or concerns.
The company deals primarily with institutional clients, who have credit lines, and the company is quick to respond if they hear of something that requires further investigation.
Avoid Making the Same Mistakes in Crypto
For retail traders looking to perform due diligence on trading platforms, Urban recommends:
- Have some trusted places that are understood and can be easily moved.
- Be careful and consider if something sounds too good to be true, it probably is.
- When looking at crypto, it is important to understand that you are buying technology as much as you are buying assets.
Urban further recommends evaluating each crypto asset to determine whether the problem it solves is worth solving and whether the instrument has the ability to monetize or add value.
Disclaimer
BeInCrypto has reached out to the companies or individuals involved in the story for an official statement on the latest developments, but have received no response.
Source: https://beincrypto.com/navigating-crypto-trading-risks-galaxy-digital/
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