Investors have removed large quantities of bitcoin and ethereum from centralised cryptocurrency exchanges such as Coinbase, Binance and Crypto.com. In the wake of the FTX bankruptcy, trust in centralised exchanges is at an all-time low and anxiety is growing as to which high-profile crypto company will be next to fall.
Data from cryptoquant.com reveals that more than $3.4bn bitcoin (BTC-USD) and $1.8bn ethereum (ETH-USD) have been removed from cryptocurrency exchanges since the drama surrounding FTX has embroiled the cryptocurrency ecosystem.
Blockchain data shows that approximately 1,563,150 ether was removed from exchanges over the last week, with exchange holdings of ether down 7.22% compared to the week before the current crisis began.
In value of the ether that was removed was more than $1.8bn (£1.52bn).
The total amount of bitcoin and ethereum that has been removed from centralised exchanges by investors from November 7 to November 14, equates to over $5.3bn in value.
Read more: Crypto tanks after FTX implosion
Investors do not feel confident leaving their digital assets in the hands of centralised platforms. The collapse FTX, which was a top-tier crypto brand with close relations with US regulators, has caused considerable disillusionment in the entire cryptocurrency industry.
Watch: It's too late' to use crypto as hedge against collapsing fiat currencies, says BitBoy Crypto | The Crypto Mile
The sudden demise of billionaire crypto-tycoon Sam Bankman-Fried and his FTX cryptocurrency exchange has decimated investor confidence and trust in centralised cryptocurrency exchanges.
After rival cryptocurrency exchange Binance announced it would dump all of its holdings in FTX's native digital asset FTT (FTT-USD), a bank run descended on the exchange headed by Sam Bankman-Fried, bankruptcy followed and now the crypto industry is hunkering down in hope the contagion does not spread further.
However, a major crypto-lending platform called Blockfi has already announced it will pause customer withdrawals. Blockfi has exposure to the beleaguered FTX exchange in the form of a $400m credit-line.
In July, FTX had signed a deal with BlockFi to provide it with a $400m revolving credit facility with an option to buy it for up to $240m.
On Monday, cryptocurrency lender BlockFi said it has significant exposure to Sam Bankman-Fried's crypto exchange FTX, and associated entities, that last week filed for bankruptcy.
BlockFi sent a statement to its millions of customers that said: "We do have significant exposure to FTX and associated corporate entities that encompass obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US."
There are now worrying parallels between recent events and the fall-out from the Terra/Luna crash in May of this year, when crypto-lending platforms first paused customer withdrawals. However, this pause quickly developed into a total collapse and customers are still waiting to retrieve their assets.
Out of all the blue-chip cryptocurrencies, Solana (SOL) has taken the biggest hit since the current crisis began, with a fall of over 50% in the past week to $14.82.
On Tuesday, the entire cryptocurrency market capitalisation stood at $884bn, up 0.9% in the last 24 hours, according to Coingecko data.
Check: Crypto live prices
Bitcoin is down over 18% in the past weekto $16,859 and ethereum fell by 19% in a week to $1,270.
Watch: Martin Scorsese's producer sees NFT's as the future of film finance | The Crypto Mile