He lost $15 billion in one day.. How the American crypto giant went bankrupt and declared bankruptcy | guide
Sam Pinkman Fred, founder of FTX (one of the largest cryptocurrency exchanges in the world), lost $15 billion of his wealth in a single day when the cryptocurrency exchange’s owner announced that he had started protections from creditors under Chapter 11 of the Act American bankruptcy while its co-founder resigned as chairman of the company is the latest exciting chapter in the career of one of the world’s most well-known crypto exchanges.
Reuters reported that “FTX” struggled to raise about $9.4 billion from investors and competitors as the popular cryptocurrency exchange tried to bail out after massive customer withdrawals.
The impasse is a quick setback for Sam Pinkman Fred, 30, a celebrity in the cryptocurrency world whose fortune was estimated at $17 billion by Forbes just two months ago.
The “Bloomberg Billionaires” index estimates the value of the “FTX” subsidiary in the United States, in which Bankman Fried owns about 70%, at just $1 due to the possibility of halting trading with it, compared to $8 billion during of the year fundraising cycle in January, penultimate. In addition, Bankman Fried’s stake in Robin Hood Markets – valued at more than $500 million – was also written off his asset account after Reuters published a report that he owned that stake through the firm Alameda Research. And she may have used collateral for her loans. In addition, “Alameda” and “FTX” were added to the US bankruptcy protection file.
And the FTXUS exchange in the United States announced last Thursday that clients should close any investment positions they wish to close, and trading operations could cease in a matter of days.
In the Bahamas, where FTX.com is headquartered, authorities have frozen the assets of its local trading subsidiary and its related parties.
Bankman-Fried is under investigation by the US Securities and Exchange Commission for possible securities trading violations, according to a source familiar with the events.
What can we learn from the FTX disaster?
The FTX exchange appeared to be among the best-performing brokers in the cryptocurrency market because even as other companies faltered amid the widespread cryptocurrency market meltdown this year, CEO Sam Benckman-Fried presented himself as the savior, buying up competitors and bought competitors to contain their customers. .
The problem was that the maximum leverage offered by the forex exchange (effectively borrowing from some clients to lend to others) made it heavily dependent on the trust factor; So if customers start to doubt their ability to pay, they are likely to withdraw their funds quickly, as is usually the case with traditional banks.
This happened in the past week; This forced Bankman Fried to look in vain for a bailout from rival exchange Binance, causing him to suffer huge losses in his fortune and sparking a broader cryptocurrency sell-off.
FTX’s lack of liquidity – estimated at $8 billion according to Bankman Fried – does not bode well for remaining customers and it is still not clear what the underlying cause of this lack is and whether other repercussions will follow and what is right What is clear is that what FTX has witnessed can be attested to by any other leveraged institution in the crypto world.
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