The collapse of crypto exchange FTX appears to have sparked surging sales for self-custodial crypto wallets which give users direct ownership of their coins.
SafePal, a Binance-backed crypto wallet brand, has experienced a 10x surge in traffic to its platform since November 11th, and its hardware wallet has made record sales within that time.
- SafePal surpassed over 7 million users over the past 6 months, with pronounced gains in November.
- In a statement shared with CryptoPotato, SafePal CEO Veronica connected its increasing traffic to FTX’s bankruptcy.
- “The recent FTX situation has taught the industry an important lesson about decentralization and transparency,” she said. “As more people realize the importance of taking full control of their assets, SafePal will become one of the major web3 gateways for the crypto masses.”
- FTX is suspected to have mishandled client assets by lending them out without user permission, rather than backing deposits 1:1 at all times.
- This eventually led to its insolvency, when a “bank run” left it unable to satisfy clients’ overwhelming demand for withdrawals.
- At the time, Binance was experiencing roughly equal net inflows to FTX, possibly being viewed as the more dependable company for previous FTX users. The larger exchange’s CEO, Changpeng Zhao, arguably sparked FTX’s collapse earlier this month with tweets spreading doubt about the firm.
- Binance has since promised to implement proof of reserves at its exchange, to ensure users that their assets are always safe.
- Nevertheless, Crypto Twitter has been vocal in encouraging traders and investors to use self-custody this month, to stay safe from future loss of funds to centralized counterparties.
- Trezor, a popular hardware wallet provider for digital assets, also reported a 300% surge in sales in the days after FTX confirmed its insolvency.
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