In light of the ongoing issues with FTX, we wanted to update our community regarding its impact on us.
💪 Our company’s ability to remain a going concern is not affected by the failure of FTX, or any of its affiliated entities to fulfill their contractual obligations.
👑 Self-custody is core to how we manage our treasury. We remain de-risked from material exposure to centralized exchanges, or lending platforms.
🔒 Request Finance is a non-custodial app: our users are likely to practice self-custody to a greater extent. We have not heard of our users being down bad.
🔍 We are also actively monitoring ripple effects, including the price stability of USD-denominated stablecoins, and the extent of the contagion on spending in crypto.
Request Finance had zero assets deposited on FTX, or FTX.us. We also had zero exposure to any counterparty risk from Alameda Research, nor any other affiliated entities Sam Bankman-Fried has had material interests in.
We were unscathed by the implosion of Terra earlier in May, as disclosed previously. We have also had zero direct exposure to the subsequent collapsing dominoes of centralized crypto platforms and exchanges.
Our company’s ability to remain a going concern is not affected by the failure of FTX, or any of its affiliated entities to fulfill their contractual obligations.
Self-custody is core to how we manage our treasury. We remain de-risked from material exposure to centralized exchanges, or lending platforms.
We recently announced that we have processed over a quarter of a billion dollars in crypto payments for over 2,300 organizations, DAOs, and enterprise teams. Request Finance remains fully capable - and more determined than ever to advance our mission to simplify paying, or getting paid in crypto.
We have not heard of Request Finance users who are adversely impacted by the inability to make withdrawals from FTX. As a non-custodial platform, users must use a self-custodial wallet to interact with Request Finance. We reason that our users are likely to practice self-custody to a greater extent than the general crypto-owning population.
Our team is also closely monitoring the price stability of USD-denominated stablecoins whose issuers were questioned over their exposure to FTX, or its trading arm Alameda Research, and other related entities including its ventures arm. As of September, USD-denominated stablecoins accounted for about 60% of the crypto payments on Request Finance.
We are also actively assessing the ripple effects of FTX possibly failing to meet its contractual obligations, and make its debtors and users whole.
FTX was widely used by many organizations in the space, including foundations, enterprise teams, institutional investors, and venture funds. Further, Alameda also invested in venture capital funds like Paradigm, Altimeter Capital Management, Sino Global Capital and Multicoin Capital.
We are aware of anecdotal reports emerging of organizations who had: (i) managed a substantial proportion of their treasury, or investment portfolio on FTX, and/or (ii) deposited assets into lending platforms who then rehypothecated those assets to counterparties like the now defunct Alameda Research.
A lot of people were exposed to FTX: formerly the world’s second largest exchange by trading volume, with reportedly over one million registered users as of 2021. Many individuals employed in crypto relied on the exchange to manage at least some portion of their savings.
Should users’ funds on FTX, or debt to Alameda remain inaccessible for prolonged periods, worse: be unrecoverable by large numbers of users, their ability to pay, or get paid in crypto may be curtailed.
Depending on the extent of the contagion, the industry may experience a broad contraction in venture funding, grant disbursements, hiring, and other forms of spending in crypto. As an app that simplifies crypto payments, these economic activities are fundamental demand drivers for our crypto payments solutions.
Despite the apparently bleak outlook, we note that some of the best innovations have always been born out of crisis. For instance, The Glass-Steagall Act was passed in 1933 in response to the failure of the banks following their exposure to toxic assets which plummeted in value during Great Depression. It restored confidence in the American financial system for decades to come.
For examples of other innovations born out of crisis, we need look no further than to the birth of our own industry in 2009, when Satoshi released the Bitcoin White Paper amidst the Global Financial Crisis of 2008.
It is often in the worst of times, that we learn lessons, and develop solutions which lay the scaffolding for a more robust future.
The situation is still developing. We will continue to keep our community appraised, in our regular updates in our Request In Numbers report published in the first week every month.
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