Lyu calls the current market scenario a "spreading cancer," pointing to the crypto free-falling, with the total crypto market capital declining from $1 trillion to $873 billion in just a few days.
On Acquiring FTX: Lyu believes that only the collective effort of the entire industry can make a change, and he is willing to contribute.
He offers a solution to save the sinking FTX ship, through acquisition or merging of two brands— FTX and Alameda Research, both owned by Sam Bankman Fried, the founder of FTX. “Only a joint brand can make some difference, and maybe save FTX from falling apart.”
A Rabbit Hole: The KuCoin CEO said that a "hole" had been discovered. He was referring to FTX reserves. “FTX is attempting to fill this gap using its own funds, but the problem is that FTX’s capital is spread across several exchanges.”
See More: Best Cryptocurrency Exchanges
Lyu emphasized that FTX was trying to withdraw all these funds from several different exchanges. "The small exchanges were shocked by the sudden demand for hundreds of millions of dollars in a day," he said.
“As exchanges transferred their own capital to FTX to fill the hole, their own cash reserves were reduced, resulting in them having to halt withdrawals all at once,” added Lyu.
The Shift: Following the FTX bankruptcy along with a string of major bankruptcy cases this year, including Terraform Labs, Three Arrows Capital, Celsius Network and Alameda Research, centralized exchanges have lost people's confidence. In response, Lyu said that demand for decentralized exchanges (DEXs) will increase, and exchanges with transparency will become investors’ top priority.
Although Lyu believes that the biggest barrier to DEX adoption is that “only tech-savvy users can use it.” In contrast, a platform that is “a mix of DEX and centralized” will be highly trusted.
Price Action: FTT is currently trading at $1.50, down 31% in the last 24 hours at the time of writing, according to Benzinga Pro.
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