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The collapse of FTX prompts the admission of other cryptocurrencies • Registry

The collapse of FTX prompts the admission of other cryptocurrencies • Registry

On Friday, the cryptocurrency exchange FTX Trading Ltd. and 134 affiliated firms filed for bankruptcy protection, and CEO Sam Bankman-Fried stepped down as CEO, handing over control to John Ray III, who also oversaw the liquidation of Enron Corp.

The collapse of FTX, which was worth $32 billion in January according to optimistic estimates, shocked the entire cryptocurrency industry.

Trading platform BlockFi suspended withdrawals over the weekend, citing “lack of clarity regarding the status of FTX.com, FTX US and [Bankman-Fried’s cryptocurrency hedge fund] Alameda”.

Another cryptocurrency exchange, AAX, stated that “withdrawals have been put on hold to avoid fraud and exploitation.” The firm said it planned to upgrade its systems to protect against fraud and malicious attacks seen in the wake of the FTX debacle.

Cryptocurrency fund Ikigai has stated that it has lost an undisclosed amount of investor money in FTH.

In addition, Hong Kong-based crypto platform Hbit Limited, a subsidiary of New Huo Technology, said he failed to withdraw $18 million in crypto from FTX, of which $13.2 million is client assets. [PDF].

According to Reuters, FTX secretly transferred or borrowed up to $10 billion in client funds to Alameda Research, and that roughly $1 or $2 billion of those funds went missing.

Bankman-Freed, apparently in the Bahamas, disputed Reuter’s characterization that the funds were secretly transferred, but offered no alternative or explanation for the allegedly missing funds.

The connection between FTX and Alameda Research was revealed on Nov. 2 when Coindesk reported that Alameda owns a large number of FTT tokens, suggesting that the two companies run by Bankman and Freed were not operating as separately as claimed.

Changpeng Zhao, CEO of rival Binance, said November 6 that he plans to sell his FTT tokens, referring to this report. This caused the price of FTT tokens to drop, and other holders of these tokens accelerated the fall in an attempt to sell their stakes. Unable to cover an approximately $6 billion withdrawal attempt, FTX became illiquid – it did not have enough cash to fulfill customer withdrawal requests.

After the Binance Crisis said he would have bought FTX only to refuse, citing “corporate due diligence as well as recent news reports of mishandling of customer funds and alleged US agency investigations.”

FTX is reportedly under investigation by the US Securities and Exchange Commission and the Department of Justice. The SEC is also reported to be looking into Coinbase Global and Binance.

An FTT token that was worth around $26 at the beginning of the month can now be purchased for around $1.38. Bankruptcy filing for FTX Trading Ltd. [PDF] transfers between assets from 10 to 50 billion dollars in assets and the same range of liabilities. Over the past 12 months, the capitalization of the cryptocurrency market has decreased by about $2 trillion.

Meanwhile, Bankman-Fried, known on Twitter as SBF, was shyly tweet a message “WHAT’S GOING ON…” in a series of one-character posts. We expect the letter “D” to fall any minute.

Hagiographically described in a now-deleted post on the website of the investment firm Sequoia, Bankman-Fried is described by author Adam Fisher in terms that, in retrospect, seem wildly obsequious and uncritical — even for a firm that invested $213 million in FTX. However, an article titled “Sam Bankman-Fried Has a Savior Complex – and Maybe You Should, Too,” managed to inadvertently pinpoint SBF’s ability to slash its net worth.

“It’s hard to see SBF in clear light,” Fisher wrote. “The brilliance of self-made billions is blinding. His intelligence is as intimidating as it is intimidating. But as soon as I cut through a lot of money and extra IQ points, I discovered something unexpected: impoverishment … ” ®

Written by khirou

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