How a $32bn Crypto Exchange Ended with Collapse — and an $8bn Hole!

By akohad Dec21,2022

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Photo by Jay Argame on Unsplash

The irony is all around

Since FTX went under last month, it’s become ever so clear that the concentration of power at the top along with a massive lack of oversight has caused gigantic customer losses. Why?

How $8bn managed to go missing?

You may be asking how on earth FTX ended up with an $8bn hole in its balance sheet but the question we should be asking is how on earth this wasn’t spotted sooner?!

Photo by 愚木混株 cdd20 on Unsplash

If it’s too good to be true, it probably is!

This whole blow-up screams similar of what happened back in ’08. Before the crash, a bunch of smartypants came up with something: CDOs. Otherwise known as collateralised debt obligations.

As for investors — time to do some actual due diligence!

It’s hard to go against the crowd

FTX’s clients included large financial groups that traded cryptocurrencies, such as hedge funds. The likes of BlackRock, Tiger Global, Inside Partners (and loads more) were all investors — and backers — of the SBF fraudster.

Photo by Andriyko Podilnyk on Unsplash

If something sounds too good to be true, that’s because it probably is!

Higher interest rates, that are at levels not seen since 2008, are exposing faults within the system. They’re also flushing out the garbage.

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By akohad

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