Cryptocurrency exchange firm FTX is in a huge financial crisis. Reports say that at least $1 billion of customer funds have “vanished” leaving huge speculations about what really is going on with the Bahamas-based crypto firm owned by 30-year old Samuel Bankman-Fried.
Reports are saying that Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Bankman-Fried’s trading company, Alameda Research. According to some sources, between $1billion and $2billion of this $10B fund could not be accounted for on Alameda’s spreadsheet and they don’t know what became of it.
On Friday, 11th of November 2022, FTX filed for bankruptcy after a rush of customer withdrawals earlier that week. A rescue deal with rival exchange, Binance, fell through, precipitating crypto’s highest-profile collapse in recent years.
Customer withdrawals had surged last Sunday after Changpeng Zhao, CEO of giant crypto exchange Binance, said Binance would sell its entire stake in FTX’s digital token, worth at least $580 million, “due to recent revelations.” Four days before, news outlet CoinDesk reported that much of Alameda’s $14.6 billion in assets were held in the token.
This is a big hit to the global perception of the cryptocurrency market. This event proves that the crypto market is in dire need of regulation so as to avoid similar occurrences in the future. Regulating the crypto space will ensure that there is no trust deficit and investors can be rest assured that their funds are always secure.