We’re all still slightly stunned at a $32 Billion company liquidating overnight and so as the new truths keep rolling out, the entire crypto world is hooked on discovering more. In a nutshell, we’re gonna call this Fyre Festival 2.0 - let’s see what went very very wrong and how they lost 80% of their worth in less than 72 hours.
The token started seemingly impressively well, becoming the largest #crypto exchange in volume, centring around allowing people and companies to invest in digital currencies, holding billions of dollars worth of customers’ deposits. Although, as the walls get a little more transparent, things took a much more disturbing turn than ever expected, leaving investors panicked and moving fast to recover their assets.
The Downhill FTX Spiral
Throughout this summer of 2022, the industry had seen a collective fall within the cryptocurrency market, and whilst CEO Sam Bankman-Fried (aka #SBF on socials) had a saintly approach towards this, there was a lot more behind the scenes to help his fraudster mask. From what we know so far, there had been multiple claims of inaccurate numbers of assets from #FTX which were in fact accumulated from another founding company, Alemeda Research. Both businesses had originally been claimed to have separate identities with no affiliation, although with the leaked evidence from #Alemeda’s balance sheet, customers grew cautious and began withdrawing deposits from FTX accounts, leading to a very steep bankruptcy.
How Far Would SBF & Caroline Ellison Go?
Despite the continuous plummet within the market, CEO Caroline Ellison had taken to Twitter and had still attempted to convince the world how well FTX was doing with no financial issues, which traders quite clearly did not believe as the market said otherwise, leading to further deposit withdrawals. With what seemed like a saving grace, #Binance had even offered to buy out FTX which was quickly backed down as further evidence became available, stating their reasons due to “a result of corporate due diligence" and investigating reports of mishandled funds. Claims even as shocking as discovering that FTX had been dipping into customer accounts in order to fund risky bets and keep themselves afloat, putting billions of dollars in danger for their own investors.
To no surprise, it has now been stated to have been the largest crypto-related bankruptcy to have been filed and we’re certain as more researchers dig deeper into this scandal, a lot more disturbing discoveries will be found, but until then we’re simply inhaling the biggest sigh of relief that this crime had been stopped before going even further.
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