Folkvang Crypto Trader Bounces Back Despite FTX’s Demise

• Folkvang, a Cayman Island-based trading firm, experienced a major blow due to the collapse of FTX exchange in November 2021.
• The firm had half of its equity parked on FTX and it managed as much as $400 million in 2021.
• Despite the loss, founder Mike van Rossum is happy that they are still standing.

FinanceAlameda-Backed Crypto Trader Folkvang

Folkvang is a market-neutral crypto trading firm based in the Cayman Islands that was founded in January 2020 by a team of seasoned crypto quant traders. The firm managed as much as $400 million in 2021 and had half of its equity parked on FTX before it collapsed. Founder Mike van Rossum revealed that their equity was halved after the crash, but they are still standing despite suffering a major blow during November’s crash.

Alameda Research Investment

Folkvang’s emergence on FTX was expected after Alameda Research—the trading firm that played a central role in FTX’s demise—invested in Folkvang and Folkvang returned the favor by investing in FTX (Sam Bankman-Fried owned both FTX and Alameda.)

FTX Collapse Aftermath

In an interview with CoinDesk, van Rossum gave an account of the messy situation following the collapse of FTX exchange. He said that it was “a tough pill to swallow” and that they had to pay back lenders out of pocket since they were active borrowers. At its peak in 2021, Folkvang managed around $400 million worth of assets including equity and loans.

Survival Despite Losses

Van Rossum recognized that this is all part of the game when it comes to such risky investments, and he’s glad that his company is still standing despite losses from the crash. During one single trade day, Folkvang did up to $8 billion worth of volume which goes to show how successful they were prior to this incident.

Crypto Industry Still Reeling

More than three months later since this crash happened, the cryptocurrency industry is still feeling repercussions from what happened with FTX exchange. It serves as an important reminder for investors who want to get involved with cryptocurrencies—to be aware of these risks associated with them because no one can predict what will happen next or how far losses may go if something similar happens again in the future.