Crypto exchange FTX is said to have used customer funds for risky bets. The company is now seeking bankruptcy protection.
FTX is one of the largest cryptocurrency exchanges in the world, and until recently the company seemed like a safe place to put your savings.
That suddenly turned when CoinDesk, a media site targeting the crypto industry, I mentioned unclear boundaries Between cryptocurrency exchange FTX and investment firm Alameda Research. Both companies are controlled by Sam Bankman-Fried.
The uncertainty caused clients to start withdrawing funds from FTX. With that said, the cryptocurrency exchange was in crisis, but the free fall only began when one of their biggest competitors, Binance, announced that they would liquidate all their crypto holdings to FTX.
Over the course of 72 hours, approximately 60 billion NOK were withdrawn from FTX, According to internal company messages seen by Reuters.
acquisition failed
It looks like the bottom was reached when Binance opened to buy FTX. The sale would secure the funds owed to clients and calm the rest of the cryptocurrency market. Soon after, Binance chose to opt out of the operation.
Popular investment firm Sequoia owns a secondary stake in FTX. They announced on Thursday That their investment of NOK 1.5 billion was probably not worth anything.
In a long Twitter thread on the same day Sam Bankman-Fried, founder of FTX, admitted that he made a number of serious mistakes and that Alameda Research would gradually exit from its investments.
– I’m sorry, Pankman repeated Fried a total of four times.
FTX reported on Friday They are seeking bankruptcy protection and that Bankman Fried has resigned.
The last in the series
The FTX problems are particularly surprising after they have marketed themselves as a safe haven in a turbulent crypto market. In the past year, several major crypto projects have collapsed or been hit with spectacular robberies.
The fall of FTX also comes in the same year they got comedian Larry David to be a single star Super Bowl ad. There, David played an old miser who was repeatedly overlooked with such important inventions as the wheel and electricity. The joke continued until David was asked to invest in FTX which, according to the announcement, is “an easy and safe way to start cryptocurrency.”
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