FTX Bankruptcy News: Imploding cryptocurrency trading firm FTX is now billions of dollars short after experiencing the crypto equivalent of a bank run.
The exchange, formerly one of the world’s largest, sought bankruptcy protection last week, and its CEO and founder resigned.
Hours later, the trading firm said there was “unauthorized access” and the funds had disappeared. Analysts say hundreds of millions of dollars could be missing.
The settlement of the once-giant exchange has hit the industry.
Here’s a look at the company’s fall so far:
Why did FTX go bankrupt?
Fearing whether FTX had enough capital, customers fled the exchange, and it agreed to sell itself to rival crypto exchange Binance. But the deal failed while Binance’s due diligence on FTX’s balance sheet was still pending.
FTX valued its assets at between USD 10 billion and USD 50 billion, and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.
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FTX and dozens of affiliated companies — including founder Sam Bankman-Fried’s hedge fund, Alameda Research — filed bankruptcy petitions in Delaware on Friday.
The week’s development marked a shocking turn of events for Bankman-Fried, who was hailed as somewhat of a savior earlier this year after he helped several cryptocurrency companies run into financial trouble. Had it.
Most recently he was worth an estimated US$23 billion and has been a major political donor to the Democrats.
Was it hacked too?
FTX confirmed on Saturday that there was unauthorized access to its accounts, hours after the company filed for Chapter 11 bankruptcy protection.
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Debate raged on social media as to whether the exchange was hacked or whether funds were stolen by company insiders – a possibility that cryptocurrency analysts cannot rule out.
Exactly how much money is involved is unclear, but analytics firm Elliptic estimated on Saturday that $477 million was missing from the exchange.
FTX’s new CEO John Ray III said it is shutting down the ability to trade or withdraw funds and is taking steps to secure customer assets.
Is my bitcoin safe?
Corey Klipston, CEO of financial services firm Swan Bitcoin, said people who own bitcoin should stay away from exchanges like FTX that effectively operate as “crypto-casino gambling websites”.
“Any exchange is a security risk,” Klipstein said. Some are more reputable than others, but he said a better option is to take control of your digital assets.
“With bitcoin, you have the option of self-custodial and taking your coins off the exchange,” he said.
Is FTX Under Investigation?
The Royal Bahamas Police Force said on Sunday it was investigating FTX, adding to the company’s woes. The police force said in a statement on Sunday that it was working with Bahamas securities regulators to determine whether any criminal misconduct had occurred at the exchange, which last year moved its headquarters to the Caribbean country.
Anyone else checking?
Prior to the bankruptcy filing and the missing funds, the US Department of Justice and the Securities and Exchange Commission had begun an investigation of FTX to determine if there was any criminal activity, according to a person familiar with the matter who spoke to The Associated Press last week. activity or securities offenses were committed. on condition of anonymity because they could not publicly discuss details of the investigation.
What are the results?
Companies backing FTX have been reducing investment, and the price of bitcoin and other digital currencies has plummeted.
Politicians and regulators are calling for tighter oversight of the burgeoning industry. FTX said on Saturday that it is moving a number of digital assets to what it identifies as a new “cold wallet custodian,” which is essentially a way to store assets offline without allowing remote control.
FTX had entered into several sports-related deals, some of which are falling apart. The NBA’s Miami Heat and Miami-Dade County decided on Friday to end their ties with FTX, and the team’s field will be renamed.
Earlier on Friday, Mercedes said it would immediately remove the FTX logo from its Formula One cars.