FTX’s Bankruptcy is a Major Blow to the Crypto Industry

The once big name centralized crypto exchange is no more

TL:DR

FTX has filed for Chapter 11 bankruptcy after a dramatic week.

• The firm’s CEO and founder Sam Bankman-Fried is resigning from his role. John J. Ray III has been appointed CEO and will work with other “independent professionals” during the proceedings.

• FTX’s financial woes are severe, with liabilities amounting to nearly $8.8 billion according to the head of institutional sales Zane Tackett.

• The White House’s Press Secretary Karine Jean-Pierre said that “without proper oversight of cryptocurrencies, they risk harming everyday Americans.”

The end of FTX?

Cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy after a dramatic week. The firm’s CEO and founder Sam Bankman-Fried is resigning from his role. John J. Ray III has been appointed CEO and will work with other “independent professionals” during the proceedings. FTX’s financial woes are severe, with liabilities amounting to nearly $8.8 billion according to the head of institutional sales Zane Tackett.

The White House’s Press Secretary Karine Jean-Pierre said that “without proper oversight of cryptocurrencies, they risk harming everyday Americans.”

The news of FTX’s bankruptcy comes as a major blow to the cryptocurrency industry. FTX was one of the most popular exchanges in the world, and its closure could have a significant impact on the market. Many experts are blaming FTX’s collapse on its lack of regulation. Without proper oversight, cryptocurrencies can be easily abused, and this lack of regulation is what Karine Jean-Pierre was referring to when she mentioned the risks they pose to everyday Americans. It will be interesting to see how the cryptocurrency industry reacts to FTX’s bankruptcy. With so much uncertainty in the market, it’s possible that we could see even more volatility in the coming weeks and months.

What Caused FTX’s Bankruptcy?

There were “certain revelations” made about Alameda Research and FTX concerning the FTT token and its actual liquidity, which there was none. The FTT token has currently been likened to a joke with some saying that the empire Sam Bankman Fried built was based upon “Monopoly Money.”

Binance CEO Zhao Changpeng made a notification to his millions of followers on twitter that he would be selling all of Binance’s FTT tokens and didn’t specify why at the time. This turned out to be part of an elaborate move to put down his competition, the move prompted probes into the financials of the FTT token, FTX, and Alameda Research showcasing the disparities between what was promised by SBF and reality. This caused the token to plummet in value and investors scrambling to get out. FTX had to pause withdrawals which is never a good sign, and that caused even more panic. Binance had stated they would save FTX by making a purchase of the company only to back out a day later as they stated the company was “beyond our ability to help” but didn’t state any real details.

Debt and repercussions

It’s unclear exactly how much money FTX owes, but it’s estimated to be around $8.8 billion. This is a huge amount of money, and it’s likely that not all of it will be repaid. This could have major implications for the cryptocurrency industry as a whole, as it may scare off potential investors who were considering entering the market.

It will be interesting to see how the cryptocurrency industry reacts to FTX’s bankruptcy. With so much uncertainty in the market, it’s possible that we could see even more volatility in the coming weeks and months. The industry is already quite volatile, and this news is sure to whip up even more speculation and fear among investors. Only time will tell how this story plays out, but for now, it seems like FTX’s bankruptcy is another black eye for an already struggling industry.

FTX, Sam bankman fried, bankruptcy
Did you enjoy this article? Great feel free to read more below and follow our socials or the best in crypto, the metaverse, and web3.

Leave a Reply