Jason Urban, head of the trading desk at Galaxy Digital, recently spoke to Forbes about the company’s experience with trading platform FTX, which collapsed last November.
At the time, CEO Mike Novogratz said Galaxy had about $76 million in cryptocurrencies locked on its platform. When asked if the firm was able to recover those funds, Urban said that the company was able to get most of its balance, but they closed at the last minute.
no one saw the downfall of ftx
Urban explained that Galaxy Digital has an extensive exchange risk committee and goes through a thorough due diligence process, asking everything from legal to custody. Despite their due diligence efforts in the crypto market, fraud is still a risk. He said that FTX was not the highest scoring platform on his test list, but it was in the upper echelon. Jason Urban said that when someone takes the money through the backdoor, there’s nothing you can do.
Asked whether the fallout from FTX and other bankruptcies throughout the year has forced Galaxy Digital to change its approach to risk management, Urban said the firm has several ways to go. Some of them include, at a minimum, annual reviews and proactive measures to respond to rumors or concerns.
The company primarily deals with institutional clients who have credit limits, and the firm responds quickly if they hear of something that requires further investigation.
Avoid Making the Same Mistakes in Crypto
For retail traders who want to conduct due diligence on trading platforms, Urban recommends:
- Having some trusted locations that are understood and can be easily transferred.
- Be cautious and consider that if something sounds too good to be true, it probably is.
- When looking at crypto it is important to understand that you are buying a technology as much as you are buying an asset.
Urban recommended evaluating each crypto asset to determine whether the problem it is solving is worth solving and whether the tool has the potential to make money or add value.
disclaimer
BeInCrypto has reached out to the company or individual involved in the story for an official statement regarding the recent developments, but has not yet received a response.