FTX victim raises $450k for liquid token startup

FTX victim, who lost over 90% of his net worth following the collapse, successfully raised $450,000 from his recently launched trading fund.

Belgian resident Kasper Vendeloock recently launched Musca Capital, a new fund that trades liquid tokens. The venture is supported by Hashmask NFT project founders and two other investors.

With the funds raised, Vandeloock aims to rebuild his trading systems and implement automated strategies. He will begin by trading liquid tokens on centralized exchanges.

Vandeloock strives to recover from a substantial financial setback resulting from the collapse of the disgraced Sam Bankman-Fried’s (SBF) FTX exchange, which led to significant losses in his net worth. He kept most of his funds on FTX, an exchange he trusted due to personal connections with SBF. 

In November 2022, the exchange went bankrupt following SBF and his team’s lack of proper capital controls and gross mismanagement,  leaving customers’ funds trapped. 

At present, only the ongoing bankruptcy proceedings offer any hope for the recovery of his funds.

What is Musca Capital

The Luxembourg-based fund Musca Capital is focused on trading liquid tokens on centralized exchanges. The firm aims to build highly scalable and robust trading systems to succeed in any trading environment.

Its investment strategy is similar to Pantera Liquid Token Fund, which invests in 10-20 liquid tokens at any time.

In a conversation with The Block, Vendeloock stated that an unfortunate incident led to a pivotal lesson for him, losing all his funds on FTX. However, the experience was a valuable learning opportunity.

He emphasized the importance of carefully looking for warning signs on exchanges and being more careful when storing hard-earned money on centralized exchanges.

FTX saga intensifies regulatory scrutiny on CEXs

The collapse of FTX has caused governments worldwide to become apprehensive about cryptocurrency exchanges, illegal activity, market manipulation, and the need to protect investors. As a result, they are increasing their efforts to regulate and monitor these exchanges.

Major cryptocurrency exchanges, like Changpeng Zhao’s Binance, continue to face increased regulatory scrutiny, including a complaint from the SEC in the US for operating an unregistered securities exchange and offering illegal securities to US investors. 

The collapse of FTX has further highlighted the risks associated with centralized exchanges, and the lack of clear regulatory pathways currently poses more challenges for market participants to achieve regulatory compliance.

Although crypto investors have largely agreed on the need for centralized exchanges (CEXs) to become regulated after FTX’s collapse, it may not be possible due to the lack of clear-cut regulatory guidelines in the US and other jurisdictions. 

The FTX case shows that companies holding crypto for customers can make investment decisions that end in disaster, and when they do, there’s no clear guarantee that customers will get their assets back. 

Therefore, it is essential to be cautious while dealing with centralized exchanges and to consider self-custody as an alternative.