Understanding the FTX Exchange Collapse: A Dynamic Connectedness Approach
Copyright policy )Understanding the FTX Exchange Collapse: A Dynamic Connectedness Approach
Employing a TVP-VAR dynamic connectedness analysis, we identify avenues through which the collapse of the FTX exchange manifested contagion effects throughout a number of financial markets. Results indicate that interaction effects become significantly pronounced, coinciding with key milestones during the collapse of FTX and related companies. Specifically, sources of contagion stem from two tokens created by the exchange and related companies, namely FTT Token and Serum. Such results further develop the expanding literature based on the inherent contagion effects of such unregulated products.
Conlon acknowledges the support of Science Foundation Ireland under Grant Number 16/SPP/33 and 13/RC/2106 and 17/SP/5447.
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- University College Dublin Ireland
- Boğaziçi University Turkey
- University of Zurich Switzerland
- College of Business Administration Latvia
- University of Waikato New Zealand
Cryptocurrency, Dynamic connectedness, GARCH, TVP-VAR, Fraud, Tokens
Cryptocurrency, Dynamic connectedness, GARCH, TVP-VAR, Fraud, Tokens
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