The $1tn digital asset market faces a crisis akin to the 2008 financial crash, according to Binance Chief Changpeng Zhao, who warned more companies might fail in the coming weeks following the troubles at FTX.

Zhao, founder of the world’s biggest digital asset exchange, said the full impact of the meltdown at rival crypto exchange FTX had yet to be felt. Speaking at a conference in Indonesia, he said the global financial crisis was “probably an accurate analogy” to this week’s events.

“With FTX going down, we will see cascading effects,” Zhao said. “Especially for those close to the FTX ecosystem, they will be negatively affected.”

The comments come as crypto traders fear further waves of contagion after a bid by Zhao to buy out FTX earlier this week fell apart, leaving one of the most prominent cryptocurrency exchanges teetering on the brink of collapse. Its failure would also deal a blow to blue-chip investors that had scooped up equity in the group, including venture capital company Sequoia and Japan’s SoftBank.

Bitcoin, the largest cryptocurrency, has shed 17 per cent over the past five days, touching a two-year low in the midst of tumultuous negotiations between Binance and FTX chief executive Sam Bankman-Fried.

Bankman-Fried has apologised for the liquidity crisis at FTX, but has not provided a detailed account of what caused it.

“This lack of transparency is what every single trader and investor is going to be very wary of going forward,” said Anatoly Crachilov, chief executive of Nickel Digital Asset Management.

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Zhao also cast doubt on a deal struck by FTX to buy assets of another crypto lender, Voyager, out of insolvency, saying FTX “obviously . . . won’t have the money” for the $1.4bn transaction.

“A few other projects are going to be in similar situations. I think it will take a couple weeks for most of them to come out,” Zhao said.

Genesis, a major crypto trading firm, said its derivatives business had about $175mn stuck on the frozen exchange. The company said the funds were “not material to our business” and would not impact its market making or trading functions.

But the Binance chief was confident the crypto sector would eventually recover. “The market will heal itself,” said Zhao.