2 - 4 minute read
FTX, a cryptocurrency derivatives exchange, has received all of Ren Protocol’s pegged assets, including bitcoin and dogecoin. Ren Protocol tweeted on Wednesday that FTX had directed the protocol to transfer all assets to debtor wallets for safeguarding “in advance of possible shutdowns of infrastructure and systems.” These assets will be held on separate, segregated cryptocurrency wallets different from those used for other debtors. Ren allowed users to transfer tokens, such as bitcoin, ether, and dogecoin, among different blockchains and became one of the most popular decentralized finance (DeFi) protocols in the 2021 bull run.
Ren Protocol was acquired by Alameda Research, the trading company controlled by alleged fraudster Sam Bankman-Fried, in February 2022, which marked the beginning of the end for the protocol. In November, Ren Protocol said it was impacted by the FTX Group’s Chapter 11 proceedings and had no funding beyond 2022 for its previous version of its service. At the time, Ren said it would try to “secure additional funding” to ensure the development and release of ‘Ren 2.0,’ which would remain completely independent of any ties to FTX.
No further development on Ren 2.0 has been publicly communicated by developers since January 2023, when Ren floated a community governance vote to fund a new Ren Foundation that would oversee the platform’s future. REN fell as much as 11% in the past 24 hours, with the bulk of losses coming after developers tweeted the move.
The Bottom Line
Ren Protocol’s transfer of assets to FTX’s cold wallets indicates that Ren is in financial trouble. Traders should keep an eye on the situation as there could be opportunities for profit if FTX uses the assets to improve its platform. On the other hand, the move could negatively impact REN’s value if FTX sells the assets on the market. It remains to be seen what FTX’s plans are for the transferred assets, but traders should stay vigilant and remain cautious in making any investment decisions related to REN.