The FTX crash has become the hottest crypto space news in the last few days. After rumors of the FTX insolvency issue, FTT experienced massive withdrawals that led to a price decline of nearly 80%.
The FTX chief, Bankman-Fried, said the exchange was experiencing overwhelming withdrawal requests and called for assistance from Binance.
As the withdrawal hurdle continued, reports revealed that Ledger, a hardware-based crypto wallet provider, got affected. The firm’s platform experienced glitches due to crypto exchanges’ overwhelming outflow of FTT.
Details Of Ledger Hardware Wallet Issue Amid FTX Crises
The Chief Tech Officer of Ledger, Charles Guillemet, reported via Twitter that their platforms experienced some scalability issues. The executive highlighted the cause of the challenges as the ongoing financial crisis of the crypto exchange FTX.
Guillemet said many crypto holders are offloading their assets from crypto exchanges to Ledger security and self-governed solutions.
The wallet provider reported this issue around 11:00 pm on November 9. In the official announcement, Ledger said its hardware wallet application, Ledger Live, had poor server performance.
Ledger tweeted that user assets are safe. However, individual issues may range from connectivity problems with the My Ledger tab and running a Genuine Check.
Ledger later tweeted that it had resolved the server outage issue within 1 hour of detection. The firm added that all systems are optimally operational. As part of the strategy to curb the FTT withdrawal frenzy, Ledger Support announced a temporary suspension of FTX and FTX.US swaps, launched in July, on Ledger Live.
According to Ledger’s announcement, the downgrade prevented some users from sending and receiving transactions to Ledger Live.
Ledger’s Announcement Draws Criticism
Meanwhile, the crypto community reacted to the announcement differently. Some criticized Ledger for not communicating the information appropriately to their customers, considering the ongoing issue with FTX.
Ledger’s words that assets are safe triggered some sensitive spots in the people. Those were the words Sam Bankman-Fried uttered a day before the FTX crash. The statement appeared unclear whether there was a hidden meaning or if it was the first time such a glitch had occurred. However, Ledger has not responded to requests to clear the air.
The concept of hardware or cold storage became popular with occurrences like the FTX crisis. Users move their assets from exchanges to hardware wallets to protect them when a crisis like this occurs.
Hardware wallets have become more prevalent in 2022 because centralized exchanges often restrict user access to funds during certain occurrences.
Considering the rate investors are moving their funds to hardware wallets, one would think Ledger’s competitors are facing the same issues.
However, Trezor, a rival hardware wallet provider, has not recorded any problems due to the FTX crisis. Josef Tetek, CEO of Trezor, said the solution to the withdrawal blow-ups is to see self-custody as necessary.
Featured Image From Pixabay, Charts From Tradingview.com
