Galaxy Digital to cut majority exposure to crypto exchange FTX

(Reuters) -Crypto financial services company Galaxy Digital Holdings Ltd said on Wednesday it was looking to cut nearly 62% of its exposure to FTX, after fears of instability at the embattled crypto exchange sparked fears of a contagion.

Galaxy, founded by Mike Novogratz, disclosed it had a $76.8 million exposure to the company, a day after Binance said it was planning to buy smaller rival FTX.

Crypto heavyweights like Coinbase Global Inc and USD Coin issuer Circle Financial have said they have minimal exposure to FTX, seeking to reassure markets as investors were left wondering if the liquidity crunch at FTX could spread to other players in the industry.

Tether, the company behind the biggest stablecoin, said it had no exposure to either FTX or Alameda, the trading firm founded by FTX co-founder Sam Bankman-Fried.

But the reassurances have done little to stem losses for major cryptocurrencies, which have been falling after the deal was announced.

Bitcoin, the most popular cryptocurrency, tumbled 4.5% and is trading below $18,000.

U.S.-based crypto venture capital firm Multicoin Capital has also been hit by the turmoil, with 10% of the assets under management at one of its funds stuck at FTX, according to a report from crypto and blockchain news website The Block.

A spokesperson for Multicoin declined to comment on the report.

(Reporting by Niket Nishant in Bengaluru; Editing by Vinay Dwivedi and Shailesh Kuber)

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