The FTX Crypto Fiasco: Bankruptcy, Plane Tracking, and Lost Billions
In the past week or so your timeline besides Twitter's implosion and tech layoffs is probably about the fall of the cyptocurrency exchange - FTX. There's many moving parts to this story that stretches back for awhile, so this post will give a quick rundown of the main points and maybe follow with the inevitable fallout that will continue. For more details, I've added some videos from Coffeezilla - it's quite a lot (the story and his energy) but he does break it down and has multiple videos about *gestures wildly*
UPDATE: Crypto News Network Reporter Coffeezilla is cancelled. For future posts about this, I’ll just break down reports until I find proper videos by proper people.
May 2019: Bahamian cryptocurrency exchange FTX was founded by Sam Bankman-Fried, who will be referred to by his moniker, SBF. Some background that will have to be for another post his arch nemesis is Changpeng Zhao (also referred to by his initials), the founder of Binance.
Dec 2019: Binance, the world's largest cryptocurrency exchange invests in the rapidly growing FTX.
Nov 2021: More of the fallout between CZ and SBF continues and Binance divests from FTX.
October 2022: With the looming prediction of a recession and the decline of crypto, many users make withdrawals from FTX. Here's the BIG issues: FTX didn't have the liquidity to cover so much rapid withdrawals in a short period of time, so FTX haled the withdrawals. Sooooooooo, you know when you need to call your ex for a favor?
Last month, CZ announced that it would acquire FTX.
For some reason on November 7th, 2022, SBF tweeted that FTX assets were fine. Ron Howard voice: they were not. That tweet was later deleted
November 9th, 2022: But wait! After some digging, turns out Binance found out that FTX was essentially financially insolvent mainly due to piss poor spending of their backing of the FTT coin whose value as you can guess has plunged. Being deceived by financial records done by the firm Alameda showing they were broke, CZ backs off the deal.
November 10th, 2022: The Bahamian government freezes FTX's assets.
November 11th, 2022: FTX has filed for bankruptcy.
Oh yeah, November 13th: there may be criminal charges brewing for SBF. Oh yeah they may have been hacked in the last couple of days, so basically if someone you know has FTX related apps - don't update them.
Fun fact: SBF's net worth was estimated to be $30bn USD earlier this year and now he's asking me for my Netflix password. Swiper no swiping!
Basically, a crypto exchange who founder casually outright modeling his business as a Ponzi scheme is getting got. It's not exactly a Ponzi scheme, but more like someone gambling all their money at the casino.
Sources: 1 2 3
UPDATE: Crypto News Network Reporter Coffeezilla is cancelled. For future posts about this, I’ll just break down reports until I find proper videos by proper people.
May 2019: Bahamian cryptocurrency exchange FTX was founded by Sam Bankman-Fried, who will be referred to by his moniker, SBF. Some background that will have to be for another post his arch nemesis is Changpeng Zhao (also referred to by his initials), the founder of Binance.
Dec 2019: Binance, the world's largest cryptocurrency exchange invests in the rapidly growing FTX.
Nov 2021: More of the fallout between CZ and SBF continues and Binance divests from FTX.
October 2022: With the looming prediction of a recession and the decline of crypto, many users make withdrawals from FTX. Here's the BIG issues: FTX didn't have the liquidity to cover so much rapid withdrawals in a short period of time, so FTX haled the withdrawals. Sooooooooo, you know when you need to call your ex for a favor?
Last month, CZ announced that it would acquire FTX.
For some reason on November 7th, 2022, SBF tweeted that FTX assets were fine. Ron Howard voice: they were not. That tweet was later deleted
November 9th, 2022: But wait! After some digging, turns out Binance found out that FTX was essentially financially insolvent mainly due to piss poor spending of their backing of the FTT coin whose value as you can guess has plunged. Being deceived by financial records done by the firm Alameda showing they were broke, CZ backs off the deal.
November 10th, 2022: The Bahamian government freezes FTX's assets.
November 11th, 2022: FTX has filed for bankruptcy.
Oh yeah, November 13th: there may be criminal charges brewing for SBF. Oh yeah they may have been hacked in the last couple of days, so basically if someone you know has FTX related apps - don't update them.
Fun fact: SBF's net worth was estimated to be $30bn USD earlier this year and now he's asking me for my Netflix password. Swiper no swiping!
Basically, a crypto exchange who founder casually outright modeling his business as a Ponzi scheme is getting got. It's not exactly a Ponzi scheme, but more like someone gambling all their money at the casino.
Sources: 1 2 3