Ftx platform bankruptcy
FTX is a cryptocurrency derivatives exchange founded in 2019 by Sam Bankman-Fried and Gary Wang. It allows users to trade futures, options, and leveraged tokens for various cryptocurrencies and other assets.
Ftx is a cryptocurrency exchange platform founded in 2019 by CEOs sam bankman and Gary Wang. The goal of creating the platform was to allow users to bet on the size of price movements in cryptocurrencies and trade futures, options, and leveraged tokens for various cryptocurrencies and other assets. One of its characteristics is that it offers a wide range of trading tools, including a comprehensive API and subsidiary accounts for institutional traders. FTX has launched several other projects such as FTX Pay, which is concerned with addressing the payment issue for merchants, and FTX NFTs, which is a marketplace for non-fungible tokens.
This and other features and huge projects contributed to ftx becoming famous at the global level and becoming considered one of the largest crypto platforms, this helped attract prominent investors such as Coinbase Ventures and Sequoia Capital.
What is ftx bankruptcy reasons?
1. Coindesk reported a leaked balance sheet from Alameda Research. The leaked balance sheet indicated that Alameda has $5.5 billion worth of FTT in collateral and debt.
2. On November 6, Alameda CEO Caroline Ellison said the leaked balance sheet was just 'a subset of our corporate entities', and that other assets over $10 billion were not included.
3. Binance exit from FTX stock Last year, Binance received the equivalent of $2.1 billion in cash (BUSD and FTT). Because of recent discoveries that have come to light, we have decided to liquidate any remaining FTT on our books. ''
4. Analysts warned of a collapse, and these developments prompted a scramble to liquidate their FTT tokensWithdrawal requests amounted to more than $6 billion, and the data showed that stablecoin outflows on FTX reached $451 million over seven days.
5. Binance withdrew from the deal to sell the Ftx exchange to binance, citing 'mishandling of client funds and alleged US agency investigations'.
What is ftx bankruptcy results?
The collapse of the ftx platform had disastrous results, similar to a massacre in the digital currency market, resulting in a state of panic and panic among investors, so that no one was spared from the consequences. Most notably:
1. Bitcoin price fell to a multi-year low of $15,600.
2. FTT itself dropped to $1.3 billion.
3. Just days after Solana announced its partnership with Google Cloud, the token dropped by 65% ​​to $13.
4. High market volatility and redemptions
5. BTC exchange outflows of 106,000 BTC per month have reached an unprecedented level according to a report by Glassnode. This indicates that investors are increasingly moving their holdings to self-guarantee solutions after the collapse and bankruptcy of the FTX platform.
What's the primary factor for the collapse of the ftx currency?
The main reason that led to bankruptcy and the sequence of events in this way is the misuse of franctional reserve banking, which is partial lending. For example: (suppose that the stock on the ftx platform of bitcoin is 10 thousand, knowing that this stock belongs to the depositors’ money and not to the platform itself, Sam Bankman lends this amountTo investment institutions or banks with the aim of ensuring the collection of double the amount that he lent, this led to a drought or a significant lack of liquidity, and when the depositors who stored their money on this platform tried to withdraw their money, they could not do so because their money was used to lend to certain parties and this called cheating).
He lends this amount to investment institutions or banks with the aim of ensuring the collection of the weakest multiple of the amount he lent, and this led to a drought or a significant lack of liquidity, and when the depositors who stored their money on this platform tried to withdraw their money, they could not do so because their money was used up To lend to certain parties and thisThe so-called circumvention.
This happens naturally in the policy of banks, but it is regulated and regulated in the world of digital currencies, because no more bitcoins can be made.