The last two weeks have been tense in the cryptocurrency world, with mudslinging on Twitter, a surprise exchange takeover bid — which then collapsed — and token values plummeting.
FTX was one of the world’s largest cryptocurrency trading platforms not long ago. The Bahamas-based crypto exchange, founded in 2019, rose to prominence quickly and was valued at more than US$30 billion earlier this year.
In less than eight days, Sam Bankman-Fried went from being termed the “King of Crypto” to his company declaring bankruptcy and him stepping down as CEO, amid federal investigations into how he handled the company’s finances.
All that has changed in the past two weeks:
- On November 2, Concerns about FTX’s true financial stability arose after an article on the CoinDesk website suggested that much of Sam Bankman-Fried’s trading giant, Alameda Research is built on a foundation largely made up of a coin invented by a sister company of FTX, rather than an independent asset.
- Binance CEO Changpeng Zhao announced on November 6 that his company would liquidate its FTT holdings due to unspecified “recent revelations.”
- “FTX is fine,” Bankman-Fried said on November 7. “The assets are fine.”
- Binance announced on November 8th that it was planning to acquire its troubled rival, FTX.
- Binance decided against pursuing a nonbinding agreement to bail out FTX on November 9, citing concerns about allegations of misconduct and an investigation by the US Securities and Exchange Commission.
- Its decision to withdraw exacerbated the ongoing crypto bear market, sending Bitcoin to its lowest level in two years.
- Bankman-Fried informed staff in a memo on November 10 that he was looking for capital and had met with Justin Sun, the founder of the cryptocurrency Tron.
- Reuters reported on November 10 that Bankman-Fried is attempting to put together a $9.4 billion rescue package for FTX.
- On November 11, FTX, its US unit, crypto trading firm Alameda Research, and nearly 130 other affiliates filed for voluntary Chapter 11, bankruptcy in the United States. Bankman-Fried stepped down as CEO.
In a series of tweets, Bankman-Fried apologized, saying:
“I’m really sorry, again, that we ended up here.”
Hopefully, things can find a way to recover. Hopefully, this can bring some amount of transparency, trust, and governance to them.”
FTX had an estimated 1.2 million registered customers who bought Bitcoin and thousands of other cryptocurrency tokens on the exchange.
Many people, from big traders to regular crypto enthusiasts, are left wondering if they will ever recover their savings trapped in FTX’s digital wallets.
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