FTX Crash Domino Effect Swallows Major Projects

The FTX crash has had an immense effect on other exchanges and networks, leaving them gasping for that last breath of air. Some of the effects include:

Solana liquidity hub Serum forking

Solana developers have forked FTX-developed token liquidity hub Serum after it may have been compromised in a hack on FTX.

On Friday, a hacker made unauthorized withdrawals of more than $400 million from FTX. The situation further exacerbated the exchange’s insolvency crisis, which led it to file for Chapter 11 bankruptcy protection.

Many Solana developers suspect the hack may have also compromised Serum, a well-known protocol that was developed by FTX and used by many apps on the Solana blockchain.

Solana founder Anatoly Yakovenko noted that developers were rushing to fork Serum’s code and resume the protocol without the involvement of FTX. Developers need another version of Serum because the original can only be updated via a private key that was controlled by someone at FTX and not the Serum DAO. As a result of the FTX hack, that key may have been compromised.

“The serum program update key was not controlled by its own organization, but by a private key connected to FTX. At this moment no one can confirm who controls this key and hence has the power to update the serum program, possibly deploying malicious code,” a pseudonymous developer called Mango Max said, adding that he is leading the Serum fork efforts", he added.

Also, several Solana apps known to rely on Serum have begun limiting their exposure. Jupiter, the largest DEX aggregator exchange on Solana, notified users that it was halting use of Serum's liquidity amid security concerns.

Other projects, Magic Eden, Mango Markets and Phantom also said they would stop relying on Serum for liquidity and have paused its use, given the security concerns.

It is important to note that a developer called Mango Max said on Twitter that he was leading the Serum fork efforts. A Solana spokesperson on Sunday confirmed to Benzinga that "the fork happened and the community is moving forward."

Visa terminates global debit card agreements with FTX

Visa Inc, the world's largest payments processor, said on Sunday it was severing its global credit card agreements with collapsed crypto exchange FTX.

"The situation with FTX is unfortunate and we are monitoring developments closely," a Visa spokesperson told Reuters.

"We have terminated our global agreements with FTX and their U.S. debit card program is being wound down by their issuer."

FTX and Visa had announced an expanded partnership in early October, including plans to introduce account-linked Visa debit cards in 40 new countries.

With this is mind, users have taken on the mission of moving their investments out of exchanges, and it does not seem like it will end soon. This step will definitely end up killing many exchanges such as Crypto.com, which has faced some issues during the past few days and kept customers concerned after CEO Kris Marszalek acknowledged that his exchange sent 320,000 ETH, around $400 million at the time, to a public address registered at a competitor exchange.