How Wall Road Escaped the Crypto Disaster

Only a small subset of Goldman’s clients are eligible to purchase crypto-related investments through the bank, said Mary Athridge, a spokeswoman for Goldman Sachs. The client underwent an “in-person training” session and confirmed receiving a warning from Goldman about the riskiness of the asset. Only then will they be allowed to put the money into a “third-party fund” that the bank has pre-checked.

Morgan Stanley clients cannot put more than 2.5% of their total net worth into such investments, and investors can invest in only two crypto funds – including the Galaxy Bitcoin Fund – run by outside managers with traditional banking backgrounds.

However, those curators may not be able to escape the crypto crash. Mike Novogratz, chief executive officer of Galaxy Digital and former Goldman investor and banker, told New York magazine last month that he took too many risks. Total assets under management by Galaxy Digital Asset Management, which peaked at nearly $3.5 billion in November, had fallen to around $2 billion by the end of May, according to the report. for a recent revelation by the company. Got Galaxy do not sell a large part of Luna three months before it collapsed, Mr. Novogratz would likely be in worse shape.

But while Mr. Novogratz, a billionaire, and the bank’s wealthy clients could easily survive losses or be saved by strict regulations, retail investors have no means of insuring them. such a guard.

Jacob Willette, a 40-year-old man from Mesa, Ariz, who works as a DoorDash delivery driver, has kept his entire life savings in a C-degree account that promises high returns. At its peak, the stored value was $120,000, Willette said.

He plans to use the money to buy a house. As crypto prices began to slide, Mr. Willette sought reassurance from Celsius executives that his funds were safe. But all he found online were evasive answers from company executives when the platform struggled, eventually freezing over $8 billion in deposits.

Representatives for Celsius did not respond to a request for comment.

“I trusted these people,” Mr. Willette said. “I just don’t see how what they did was not illegal.”

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