Crypto exchanges manage liquidity crises following major hacks by leveraging insurance funds, seeking emergency financing, suspending services, and collaborating with industry players.
A liquidity crisis occurs when an organization lacks sufficient liquid assets, such as cash or assets readily convertible to cash, to meet its short-term financial obligations.
Major hacks in the cryptocurrency exchange sector can trigger liquidity crises in several ways. The immediate depletion of assets, especially from compromised hot wallets, can severely impact an exchange’s ability to process withdrawals and maintain normal operations.Â
