Historic scandal in the crypto world: FTX declares bankruptcy
- On Friday 11th November, one of the most important cryptocurrency platforms (it was once valued at $32 billion) went bankrupt, and consequently, its founder Sam Bankman-Fried resigned as its chief executive.
- It all started when earlier this week, Binance (the # 1 cryptocurrency platform), warned about mismatches between the assets and liabilities of Alameda Research (Bankman-Fried’s cryptocurrency trading business). Furthermore, Binance’s own CEO, confirmed on Twitter that he was going to liquidate all positions he held in FTT (FTX token), which meant a massive withdrawal of funds that Alameda Research was unable to address.
- There was a rescue attempt from Binance, but when they analysed the accounts, they realised the gravity of the situation, so they withdrew the offer.
- The fall of FTX has had a contagion effect on the entire crypto market, as Bitcoin has fallen again and is at a 2-year low, reaffirming the negative year that cryptocurrencies are suffering.
- Source: Financial Times