FTX crash makes all crypto market is down and FTX has also stopped withdrawals from exchange now.
The FTX Sam Bankman-Fried founder and CEO has also publicly apologized and is facing anger and fury from investors everywhere.
Meanwhile, news of Binance taking over FTX was getting revived but now Binance has backed out of this deal as some facts came in front of Binance in the liability check of FTX, due to which Binance thought it right to back out from the deal.
As per source binance has filed insolvency, now it has to be seen that today investors invest in these high risk business by taking such a big risk.
Did they learn anything from this ftx crash or would they prefer to just forget it as a business call.
Let’s see, for what reason this happened and who did the mistake?
Who is Sam Bankman-Fried ?
Born in 1992, Sam Bankman-Fried grew up in California. As a high school student, he attended the Canada/USA Mathcamp, a summer program for mathematically proficient students that also counts his future business partner Gary Wang among its alumni.
Bankman-Fried later graduated from the Massachusetts Institute of Technology (MIT) with a degree in physics. He traded currencies, futures and exchange-traded funds for Jane Street Capital.
Founding of FTX
Over a year and a half after founding Alameda, Bankman-Fried partnered with Gary Wang, a fellow MIT alumnus and former Google software developer, to launch FTX. The business boasted a strong risk management system and enabled trading on derivatives and crypto tokens. Binance joined FTX as the company’s first investor thanks to Bankman-Fried, also known by his initials SBF.
Bankman-Fried was based in Hong Kong, where his business had previously had its main office. He relocated to the Bahamas last year after FTX made the decision to move its headquarters there.
Sam Bankman-Fried Wealth
Before the FTX crash wiped out most of SBF’s wealth, he was one of the richest people in the digital asset industry. Forbes estimates his net worth to have peaked at $26.5 billion amid a wave of institutional adoption that pumped up crypto prices to record highs last year.
As of Now After the FTX crash,his wealth is now approx $900 million as reported.
FTX crash | What happend?
FTX crash | Although it is possible to claim that FTX’s issues date back years, they came to a head on November 6 when Binance CEO Changpeng Zhao announced that the largest exchange by volume will be selling its holdings of FTX’s native token, FTT. Zhao claimed that “new findings that have come to light” regarding the token were the reason for the decision.
It was revealed earlier this month that Sam Bankman-trading Fried’s company Alameda Research has a sizable holding in FTT on its balance sheet, potentially supporting the stock’s value.
In the midst of the uproar, FTT prices dropped like a stone, and FTX was in disarray as withdrawals grew.
When Zhao tweeted that his business would be buying FTX, Binance appeared to be FTX’s saviour, but the agreement rapidly fell through.
As news broke early on Thursday morning that Bankman-Fried would shut down his Alameda trading platform and was looking for investors to provide FTX with emergency funding as it faces a $8 billion shortage, he tweeted the obvious.
What now for FTX ?
FTX crash is stunning when considering earlier this year FTX raised $400 million at a $32 billion valuation. According to Crunchbase, FTX has raised nearly $2 billion total. Investors in FTX include the likes of the SoftBank Vision Fund, Singapore’s Temasek Holdings, Paradigm and Lightspeed Venture Partners.
Despite the collapse and the ongoing “crypto winter” which has seen crypto prices fall substantially off their highs last November , venture investors say while some faith may have been shaken in the market, they are not changing their long-term strategies.
“I do think that there will be an effect on investment in the crypto space for sure,” said crypto investor Jai Das, partner, president and co-founder at Sapphire Ventures. “I believe the investments will shift more toward the building of the next-generation computing platform — aka Web3 — which is blockchain based and is more distributed and secure.”
“The valuations of many of these startups will come down, but I believe the smart crypto and blockchain investors will keep funding the best and brightest crypto founders,” he added.
Now FTX and their over 100+ subsidiaries filed for Chapter 11 Bankruptcy after the FTX Crash, and the CEO, Sam Brokeman-Fried, will most likely go to jail for mishandling users’ funds and accounts to cover up losses in other areas of his business.
Struggles for the customer for his money
If you couldn’t trust an exchange like FTX, you can’t trust any exchange,” One customer said before the bankruptcy filing and after the FTX crash. “And then if you can’t trust exchanges, the whole premise of cryptocurrency doesn’t work.”
Cryptocurrency exchange FTX was one of the biggest players in the industry, often considered a survivor in a broad market crash that has taken down a number of crypto firms this year. But its rapid collapse this week has left customers wondering if they will ever see their money again.
It isn’t clear how long it might take customers to get their money back, or whether they will get anything at all.
Sam Bankman-Fried Golden Boy to Villain
Sam Bankman-Fried has transformed from a crypto-hero to a villain in a matter of days after the FTX crash.
His billion-dollar net worth has vanished. He is the subject of inquiries from the Securities and Exchange Commission and the Justice Department. His company, FTX, has gone bankrupt, shattering many people’s aspirations for the future of cryptocurrency.
In order to support him at a conference he planned to promote his idea of a sophisticated financial system based on digital assets, Bill Clinton, Tom Brady, Katy Perry, and other well-known figures traveled to FTX’s Bahamas base. He recently mentioned becoming the first trillionaire in history. He generously donated to political candidates and causes, and he adopted the philosophy of effective altruism, which encourages young people to earn a lot of money so they may give it all to charity.
For Sports and Entertainment | Click here
For Gaming and Esports Events | Click here
[…] Why FTX crash 2 mintues read | click here […]