FTX’s bankruptcy rocks the cryptocurrency world

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FTX, one of the world’s largest cryptocurrency trading platforms, announced on Friday that it was filing for bankruptcy and that its boss had resigned.

 

This fall of one of the giants of cryptocurrency has not finished shaking the sector. Less than a week after the first doubts about the solvency of the platform were raised, FTX says goodbye to the world of digital assets. Still valued at 32 billion dollars (30 billion euros) a few days ago, this failure represents an unprecedented shock for professionals in the field, normally used to crises of mistrust.

 

According to the American media, the fortune of its boss, Sam Bankman-Fried, estimated at 16 billion dollars, has disappeared in a few days.

 

A real fall for a virtual company

 

FTX was a global cryptocurrency exchange player, becoming the second largest platform in the world, behind its competitor Binance.  However, its founder, from his nickname SBF, who ran the company from the Bahamas, did not place his pawns in the right place at the right time. And the fall of his empire is not virtual.

 

It all began on November 2, when magazines revealed that the Sam Bankman- Fried-owned Alameda Research fund was investing in cryptoassets issued by FTX.com, and thus found itself involved in a dubious financial arrangement that carried major interest risks. The problem? Alameda Research’s assets were largely denominated in FTT, a cryptocurrency used only on the FTX platform.

 

A few days later, Binance announced its intention to sell its FTT tokens. This caused the price of this virtual currency to plummet and many customers rushed to sell their assets stored on the platform.

 

Faced with this overflow, the company is unable to meet these withdrawal requests due to lack of money. It had reported more than 100,000 different creditors and between $10 and $50 billion in assets and liabilities.

 

To help its business “adversary,” Binance made an offer to buy it out. However, the company backed out some time later, citing “mismanagement” of client assets and an ongoing investigation by the US authorities. As a result, FTX filed for bankruptcy and the company was placed in the hands of liquidation specialist John J. Ray III.

 

And as news never comes alone, on Saturday, the company was the victim of a computer attack. “Unauthorized transactions” were found according to Ryne Miller, legal manager of the platform. According to cryptocurrency analytics firm Elliptic, “$477 million would have been stolen.

 

This spectacular failure echoes the crash of Lehman Brothers, the bank whose fall had triggered the financial crisis of 2008.

 

Read also >G20 summit to focus on regulation of crypto-currencies

 

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FTX, one of the world’s largest cryptocurrency trading platforms, announced on Friday that it was filing for bankruptcy and that its boss had resigned.

 

This fall of one of the giants of cryptocurrency has not finished shaking the sector. Less than a week after the first doubts about the solvency of the platform were raised, FTX says goodbye to the world of digital assets. Still valued at 32 billion dollars (30 billion euros) a few days ago, this failure represents an unprecedented shock for professionals in the field, normally used to crises of mistrust.

 

According to the American media, the fortune of its boss, Sam Bankman-Fried, estimated at 16 billion dollars, has disappeared in a few days.

 

A real fall for a virtual company

 

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FTX, one of the world’s largest cryptocurrency trading platforms, announced on Friday that it was filing for bankruptcy and that its boss had resigned.

 

This fall of one of the giants of cryptocurrency has not finished shaking the sector. Less than a week after the first doubts about the solvency of the platform were raised, FTX says goodbye to the world of digital assets. Still valued at 32 billion dollars (30 billion euros) a few days ago, this failure represents an unprecedented shock for professionals in the field, normally used to crises of mistrust.

 

According to the American media, the fortune of its boss, Sam Bankman-Fried, estimated at 16 billion dollars, has disappeared in a few days.

 

A real fall for a virtual company

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