Cryptocurrency prices plunged for a second-straight day after crypto exchange Binance said it was pulling out of a deal to purchase failing rival FTX Trading.

Bitcoin sank to a two-year low after Binance confirmed earlier rumors and news reports that it was ready to back out of the FTX deal, struck between the CEOs of the two exchanges on Tuesday. The deal was pending Binances due diligence on FTXs balance sheet.

After an initial review, Binance said in a statement Wednesday that it had significant concerns that convinced it to back out of the deal.

In the beginning, our hope was to be able to support FTXs customers to provide liquidity, but the issues are beyond our control or ability to help, Binance said in a statement.

The price of bitcoin plunged more than 13% to $15,840, according to CoinDesk, its lowest level since November 2020. It had been above $20,000 earlier in the week. The other major cryptocurrency, Ethereum, dropped 13%.

FTX had agreed to sell itself to Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital. The sudden sale was a shocking turn of events for FTX CEO and founder Sam Bankman-Fried, who was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.

FTXs own crypto token, known as FTT, plunged more than 50% on the reports. The token, now worth around $2.50, was worth 10 times that amount only a week ago. Many of crypto investors concerns centered on whether the balance sheet of an affiliated company of FTX known as Alameda Research was saturated with increasingly worthless FTT tokens, whose total value would not exceed the exchanges liabilities, effectively making FTX insolvent.

After Binance had a chance to look at the books of FTX, it became clear that the problem was too big to solve. A person familiar with the matter, who couldnt speak publicly because he was not authorized, described the books as a black hole in which it was impossible to differentiate between the assets and liabilities of FTX the exchange and those of the Alameda Research hedge fund.

The books were a nightmare, and the relationship between FTX and Alameda was incestuous at best, the person familiar with the matter said.

In a further illustration of FTXs financial straits, Bankman-Fried asked his investors Wednesday for $8 billion to cover withdrawal requests, according to The Wall Street Journal, citing unnamed sources.

FTX is now reportedly under investigation by U.S. authorities for how it handled customers deposits, according to Bloomberg News and other media outlets.

Shares of publicly traded exchanges exposed to crypto also plunged on the developments. Robinhood shares closed down roughly 14% and Coinbase shares lost around 10%.

FTX is the latest cryptocurrency company this year to come under financial pressure as crypto assets have collapsed in value. Other failures include Celsius, a bank-like company that took in crypto deposits in exchange for yield, as well as an Asia-based hedge fund known as Three Arrows Capital.

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Can economic stress that mothers experience while pregnant affect how quickly their children ageand perhaps how early they die?

Quite possibly, a new study out of the University of Wisconsin-Madison and American University in Washington, D.C., released Tuesday, suggests.

People who experienced poor economic conditions while they were in utero aged faster later in life, as demonstrated by their biological age, the authors found. Independent of chronological age, ones biological age reflects environmental exposures and disease risk, and is ideally lower than ones chronological age. Adverse events while one is in utero may affect ones epigenome, a set of chemical compounds that tell the genome what to do and regulates aging.

The study bolsters the case that disparities in individuals begin to develop before were even born, before we can choose what to eat, before we can choose to exercise, said Lauren Schmitz, an assistant professor in the La Follette School of Public Affairs at the University of Wisconsin-Madison who is trained in both economics and genetics, and who was one of the studys co-authors.

They died faster, aged fasterand this was among people who actually survived to be age 75.

The researchers examined data from 832 participants in the U.S. Health and Retirement Study, all of whom were born in the 1930s during the Great Depressionthe worst economic downturn in the nations historyand were still alive in 2016. The participants provided a blood sample that was used for epigenomic profiling

Additionally, researchers looked at economic data on wages and unemployment from the state that each participants mother lived in during her pregnancy, in addition to that participants health data. They compared each individual whose mother experienced relatively worse economic conditions during her pregnancy with another person born around the same time, in the same state, whose mother had experienced better economic conditions.

Schmitz and her co-author, Valentina Duquean assistant professor in the Department of Public Administration and Policy at American Universitydont know how economic conditions pregnant women experienced affected fetal development. Perhaps the damage done was a result of stress, nutritional deprivation, or a combination of factors, they wrote.

The study makes the case that social safety net programs that provide support to women and families, particularly during hard economic times, may improve the health of childrennot just in the short term, but in the long term.

Health care costs for elderly individuals are typically sky high, with Medicare often bearing the burden. Relatively small up-front investments in pregnant womeneven just having more parental leave for women, so they dont have to be under a lot of stress or during a pregnancymay have sizable impacts on population health down the road, she contends.

If there were ways to help mitigate these costs by making more investments [in people] at younger ages, that could be a potential net gain for society.

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New Twitter Inc. owner Elon Musk emailed his workers for the first time late Wednesday to prepare them for difficult times ahead.

Musk said there was no way to sugarcoat the message about the economic outlook and how it will affect an advertising-dependent company like Twitter, according to the email reviewed by Bloomberg News. He said remote work will no longer be allowed and employees will be expected to be in the office for at least 40 hours per week, subject to exceptions he himself would approve.

Twitter has been under Musks leadership for close to two weeks, in which time he has dismissed roughly half its workforce and most of its executive suite. The new boss has upped the price for the Twitter Blue subscription to $8 and attached user verification to it. Musk told workers in the email that he wants to see subscriptions account for half of Twitters revenue.

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President Joe Biden said he still plans to seek re-election and that hed likely make an official call early next year after Democrats staved off worst-case-scenario congressional losses in Tuesdays midterm elections.  

Our intention is to run again, thats been our intention, regardless of what the outcome of this election was, Biden told reporters Wednesday at the White House.

Biden has thus far avoided officially launching his 2024 campaign, saying he intended to run but the final decision would be dependent on his health and discussions with his family. 

My guess is itll be early next year that we make that judgment, he said Wednesday.

The presidents upcoming 80th birthday has fueled questions about whether he should pursue a second term. 

Biden has also said he had resisted formally declaring a candidacy because he wanted to avoid running afoul of election regulations. Declaring as a candidate could have hindered his ability to raise cash for Democratic contenders before the midterm elections, and then again from the same donors for a re-election campaign.

In the weeks before Tuesdays vote, Biden has more strongly hinted hes planning a re-election run. During a radio interview with Willie Moore Jr. earlier this week, Biden said he felt 30 years younger than his actual age.

Theres so much we can do, and were just getting started, Biden said.

The previous month, Biden told MSNBC that he intended to run for a second term and that he had the support of first lady Jill Biden. On Wednesday, he again cited his family as pivotal to his decision.

My intention is that Im running again. But Im a great respecter of fate, and this is ultimately a family decision. I think everybody wants me to run, but were gonna have discussions about it, he said. 

Trumps 2024 Tease

Bidens 2020 opponent  former President Donald Trump  appears to be priming an announcement of his own. During a rally on the eve of Election Day, Trump said he planned to make a very big announcement on Nov. 15 from his Mar-a-Lago estate in Florida.

The previous week, Trump told supporters to get ready because he would very, very probably run again.

Biden has described Trumps continued influence in American politics as extreme, and framed much of his midterm campaigning around depicting Republicans in the thrall of the former president as a threat to democracy. In remarks at a Democratic fundraising event earlier in the year, Biden likened Trumps political philosophy to semi-fascism.

Polling suggests that Americans arent enthusiastic about the likely rematch. Just 27% of Americans say they want Biden to run again and only 28% say the same of Trump, according to a YouGov poll released earlier this month. Biden would hold a six-point polling lead in a head-to-head contest, according to a separate YouGov survey conducted late last month.

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Barely a day after Binance CEO Changpeng Zhao said his company wanted to buy competing crypto exchange FTX, the deal is off.

The Wall Street Journal reported on Tuesday that Binance was walking away from the acquisition due to reports alleging FTX mishandled customer funds. Earlier, CZ had tweeted that by signing a non-binding letter of intent, Binance always had that option.

In the beginning, our hope was to be able to support FTXs customers to provide liquidity, but the issues are beyond our control or ability to help, Binance said in a statement to the Journal, which along with CoinDesk reported earlier that the deal was looking more doubtful after CZ got a look at FTX CEO Sam Bankman-Frieds books.

Before reaching an agreement with Binance, FTX had reached out to Silicon Valley and Wall Street billionaires asking for funding, according to Semafor. The exchange also was turned down by other rival crypto exchanges, Coinbase and OKX, according to CoinDesk.

Now that Binance indeed has backed out, FTX will need to find another way to fill what could be a $6 billion (or greater) hole in its balance sheet. This could mean finding a new buyer. This could also mean bankruptcy.

Filing for bankruptcy, though, is a lengthy process that doesnt guarantee all creditors will be repaid. While some of the big-name venture capital firms like Sequoia, SoftBank, and Tiger Global Management, likely will be prioritized, smaller FTX investors could lose out.

When the crypto lender and exchange Voyager Digital went bankrupt earlier this year, its millions of customers were designated as impaired claimants who werent entitled to get all their crypto back. Ironically, FTX US, the U.S.-based arm of FTX, was set to pay $1.4 billion for Voyager, after winning a two-week-long auction earlier this year, although other offers may still be considered.

Either way, because of the way the bankruptcy process is structured, FTX would lose control of its assets and likely would find itself under the purview of a bankruptcy judge.

The only winners will be lawyers

Ric Edelman, founder of the Digital Assets Council of Financial Professionals (DACFP) and author of The Truth About Crypto, told Fortune that if FTX faces bankruptcy, investors and account holders could pay dearly.

Either way, investors are wiped out. Those with dollars, coins, or tokens on the platform may or may not get their assets back. Lawsuits will be flying, and the only winners will be the lawyers, Edelman told Fortune in an email.

SBF initially vowed in a tweet that customers would be protected, but he later deleted it.

In a year full of crypto catastrophes, including the Terra/LUNA debacle, FTX crashing to earth may yet prove the worst. News of FTXs liquidity crunch and Binances apprehension over acquiring its rival exchange has already sent markets spiralingover 24 hours, the global crypto market cap sank more than 13%, to about $790 billion, falling below $1 trillion for the first time in months. It was $3 trillion a year ago today.

Bitcoin, the largest cryptocurrency by market cap, plummeted more than 14% over 24 hours to around $16,000, its lowest level since November 2020. Meanwhile, Ether, the second-largest, fell more than 16% to about $1,100 in that same span.

The incident will exacerbate the Crypto Winter, Edelman added, deepening crypto prices and delaying the crypto markets recovery by many months.

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The crypto world has been reeling today amid news that FTX, the second-largest and fastest-growing crypto exchange, essentially collapsed overnight amid a takeover by rival Binance.

This is not the first time that a large crypto firm has folded abruptly. Celsius and Voyager provide two similar examplesboth went under this past spring. And on their way out, dipped into customer accounts to try and stay afloat. As the full ramifications of the FTX insolvency and collapse become clear, it raises questions about just how safe it is to keep tokens in exchanges or with brokerages. 

The significance the FTX collapse

For those who dont follow every twist and turn of the crypto industry, the collapse of FTX is a big deal by any measure.

As the second-largest crypto exchange, FTX and its CEO Sam Bankman-Fried, who goes by SBF, were rising stars in the crypto world. Just this past August, SBF appeared on the cover of Fortune, and even prior to that he was a very public and well-respected figure, says Josh Fraser, co-founder of Origin Protocol, a company that created Origin Dollar, a yield-bearing stable coin, and Origin Story, an NFT platform.

This is absolutely massive, Fraser said during an interview. SBF has been very visible in the industryfrom sponsoring stadiums and appearing on the cover of magazines to being in Washington D.C. talking to regulators and calling for more regulations of cryptohes been really working to make a name for himself and has been a very trusted person. A lot of people respected him and viewed him as a good actor.

In the end however, it seems FTX was not all that it appeared and had not been keeping its promises to its customers, says Fraser. This includes promises about not lending out customer deposits and that customer assets were safe with FTX. Clearly that was not the case. Assets were not safe. So this is absolutely huge and unfortunately a lot of innocent people are getting hurt by this, Fraser added.

While it remains to be seen just how much damage will be done by FTXs implosion, there are some lessons crypto investors can learn from this case. Chief among themkeeping coins in crypto exchanges or brokerages, particularly amid volatility or downturns, is not the safest move. 

Should you keep crypto in brokerages and exchanges? 

Its important to make a distinction between investing in crypto generallywhich experts say still remains safe when you follow a few key best practicesand keeping your coins in brokerages or exchanges such as FTX. 

There is often a lack of transparency with brokerages and exchanges that can be problematic, youre also allowing someone else to hold your assets, and trusting that they will do so responsibly.

1. Not your keys, not your coins

Theres a well-known expression or golden rule in the crypto industryNot your keys, not your coins. And it essentially boils down to the fact that when you turn your coins over to someone else to hold and keep secure, youre abdicating control over them.

When you leave your crypto on an exchange, whether its centralized or decentralized, you have given up control. Youre taking their promise that your bitcoins are actually there, says Peter Eberle, president and chief information officer for Castle Funds, an investment firm that has been managing funds invested in Bitcoin and other digital currencies since 2017.

This is concerning because as the FTX case makes clear, there continues to be a lack of transparency among exchanges, which leaves opportunity for mismanagement. On the stock market, you leave your stocks with a custodian, and its safe because they are more regulated, and they are audited. These exchanges work in this dark hole where you cant see into it, continues Eberle. Just today there were several announcements about how theyre going to have to provide more transparency.

Fraser offers similar advice, pointing out that keeping coins in an exchange is almost always a bad idea, no matter whats going on with the broader market.

FDX is not the first exchange to fail, says Fraser. The whole point of crypto is that you dont have to trust other people anymore. Crypto was designed to save us from this exact problemthese opaque systems where you dont know what is being done with your money.

2. Custody your own assets

Related to the points just made, rather than keeping coins on exchanges or with brokerages, its far safer to custody your own assets. This means keeping them in a physical hardware wallet similar to a USB drive or alternatively, in an online software wallet. In both cases, you are the one who maintains control over the coins and access to them is protected through private key cryptography.

Private key cryptography is the same technology that allows us to visit a website and enter our credit card information online safely, explains Fraser. Its the same technology as that. These keys are what secure your assets, your digital assets.

When you opt for a hardware wallet, such as a Ledger device, only when you are moving crypto currency around do you put your coins on the internet. The rest of the time, they can be kept in your hardware wallet in a safe, or safety deposit box, says Eberle.

3. Invest in professionally managed accounts

For high net worth crypto investors, yet another measure of safety may be achieved by investing through professionally-managed accounts. This is what Eberles own firm, Castle Funds, does. He specializes in working with accredited, high-net-worth investors and when handling crypto investments the firm uses offline custody tools for clients assets.

The vast majority of the time, our tokens are in custody offline, so it does away with the risk, such as an exchange risk, says Eberle. The only reason to leave tokens on an exchange is laziness, or lack of understanding in terms of how to put crypto in your wallet.

If you are new to crypto investing, its important to have someone who is experienced, guide you through the process of putting crypto in your own wallet.

Bottom line, says Fraser, is that crypto investing as a whole remains safe. But exchanges and brokerages continue to lack transparency.

Dont confuse whats happening on these exchanges with crypto itself, says Fraser. Absolutely do not leave money on exchanges. Pull it off. But thats true all the time. For people who are too scared to handle self custody, consider regulated platforms like Coinbase, which is transparent and publishes its reserves. Using platforms like Coinbase, people can see theres no funny business and that their money is safe.

This week, many investors had a front-row seat to the conflict between two of the largest cryptocurrency exchanges, FTX and Binance. The aftermath shows a grim picture of frightened investors looking for a way to minimize risk and cut their losses after some steep declines in popular coins like Bitcoin and Ether. 

Others are taking this opportunity to capitalize on plummeting prices and buy the dip. 

Whether youre interested in buying or selling crypto, the most popular avenues usually involve purchasing or selling coins through an exchange via an app or a website. But whats the safest way to go about buying and selling your cryptocurrency? Well, its complicated. 

Cryptocurrency is inherently risky  

Crypto is still the new kid on the block when compared to other assets. Theres always some level of risk involved when it comes to investing, but as a newer, alternative investment, risk is almost certainly part of the deal. What makes crypto attractive to so many investors is the loose regulations around this investment. Compared to other types of assets like stocks, cryptocurrency is not currently well-regulated.

The downside is that putting your funds behind crypto exposes you to greater risk of fraud, losing your funds in the event of bankruptcy, and major losses due to increased volatility.  

Many crypto enthusiasts argue that regulation could stunt innovation and defeat the purpose of decentralized currency, which is to cut out middlemen like big banks and the federal government. But industry pros argue that the cryptocurrency market is flawed in a big way, and investors are paying the price. 

Many cryptoassets operate on open, permissionless networks that allow anyone, anywhere to trade on the network, whichby designmakes it difficult to track individual actors, said FDIC Acting Chairman Martin J. Gruenberg at the Brookings Institution on The Prudential Regulation of Crypto-Assets. This design feature also makes it nearly impossible to ensure compliance with antimoney laundering and counter terrorism financing requirements. 

The benefits of investing in crypto 

Still, even with the potential risks associated with investing in crypto, cryptocurrency can be a valuable way to diversify your investing portfolio and spread your risk across a few different asset classes. 

Some investors regard cryptocurrencies like Bitcoin as a valuable hedge against inflation because there are a fixed number of coins that can be mined, unlike regular currency controlled by the central bank which sees regular increases and decreases in supplyalthough some experts say this has changed over time. 

How to invest safely 

If youve decided to invest in crypto, there is no surefire way to eliminate risk, but there are a few steps you can take to invest safely. 

  1. Use a secure device: Public computers and WiFi networks expose you to potential fraud. When you purchase crypto, youll likely be asked for personal financial information that you wouldnt want hackers to get their hands on. Opt to use your personal computer and a virtual private network (VPN), which helps establish a secure connection between you and the internet and keeps your sensitive information safe. 
  2. Choose a reputable exchange: Youll want to scope out different crypto exchanges and compare the cryptocurrencies being offered, fees associated with buying and selling crypto, as well as the exchanges track record. Do your research to determine if this exchange is well-established and if there have been any security breaches in the past. Read each exchanges user terms and agreements carefully to learn more about where your funds are kept and what happens to your money in the event that the exchange goes bankrupt. You may also want to spend some time combing through user reviews to find out if there are any major red flags you should be aware of. 
  3. Think carefully about how you plan to store your crypto: When you invest in crypto, you have the option of keeping your currency in a web-based wallet hosted by your exchange. While this may be a low-lift option, it could cost you down the line if you need to turn your coins into real cash or if your exchange fails. Alternatives like hardware wallets keep the private key to your cryptocurrency safe in an offline storage device.Alternatives like hardware wallets keep the private key to your cryptocurrency safe in an offline storage device. 
  4. Consult your budget: Whether youre investing in crypto, stocks, bonds, commodities, or any other kind of asset, youll need to carefully evaluate your current financial situation to determine how much you can comfortably afford to invest. There are no guarantees in the investing world and its never a wise idea to put more on the line than you can afford to lose. 

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EDITORIAL DISCLOSURE: The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.

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