What Is Happening at FTX Cryptocurrency Exchange
2022-11-16
LRC
TXT
大字
小字
滚动
全页
1FTX was one of the world's largest exchanges for digital money called cryptocurrency.
2FTX's problems worsened over the weekend and threatened the entire industry.
3Sam Bankman-Fried founded FTX in 2019.
4He grew the trading firm quickly by attracting the biggest investors in Silicon Valley.
5Last week, FTX declared bankruptcy.
6Bankman-Fried resigned.
7The firm said some money had disappeared.
8And experts say hundreds of millions of dollars may have been lost.
9The collapse of FTX is a shock to the cryptocurrency industry, which has seen a fair number of problems this year.
10Bitcoin, the world's biggest cryptocurrency, has dropped about 65 percent in value for the year.
11And Ether, the world's second most valuable cryptocurrency, lost 20 percent over the last weekend, CoinDesk data showed on Monday.
12Investors fled FTX last week over fears about whether the firm had enough money.
13And FTX agreed to sell itself to another crypto exchange Binance.
14But the deal collapsed while Binance was researching FTX's finances.
15Last Friday, FTX and several connected companies filed for bankruptcy.
16The firm had valued itself between $10 billion to $50 billion.
17It listed more than 130 partner companies around the world, its bankruptcy filing said.
18And Bankman-Fried who had rescued several cryptocurrency companies also resigned as chief executive of FTX.
19On Saturday, FTX said there had been "unauthorized access" to its accounts, just hours after the bankruptcy filing.
20A debate started on social media about whether the exchange was hacked or a company member had stolen money.
21Exactly how much money involved is unclear.
22But analytics company Elliptic estimated Saturday that $477 million was missing from the exchange.
23FTX's new chief John Ray III said it was stopping any trade or withdrawal and taking steps to secure investors' money.
24Cory Klippsten is the head of financial services company Swan Bitcoin.
25He said people who own bitcoin should be fine if they keep them off exchanges like FTX.
26He said they work like a crypto "gambling website."
27"Any exchange is a security risk," said Klippsten.
28Some operate better than others, but he said a better choice is to take control of your digital assets.
29With bitcoin, it is possible to take coins off the exchange, he said.
30On Sunday, the Royal Bahamas Police Force said it is investigating FTX, adding to the company's problems.
31The company had moved its headquarters to the Caribbean country last year.
32Even before the bankruptcy filing and missing money, the U.S. Department of Justice and the Securities and Exchange Commission began examining FTX.
33The agencies were looking into whether any criminal activity or financial crimes were committed, a person familiar with issue told The Associated Press.
34The outcome of FTX's bankruptcy is uncertain.
35But its failure will likely result in the destruction of billions of dollars of wealth and create even more doubts about cryptocurrencies.
36Sequoia Capital has invested in several successful companies that became Apple, Cisco, Google, Airbnb and YouTube.
37It described its meeting with Bankman-Fried as "talking to the world's first trillionaire" and decided to invest in FTX.
38After FTX filed bankruptcy, Sequoia has since written down its $213 million in investments to zero.
39And a pension fund in Ontario, Canada also wrote down its investment to zero.
40Bankman-Fried had been the subject of some criticism before FTX collapsed.
41He largely operated FTX out of U.S. oversight from his headquarters in The Bahamas.
42But Bankman-Fried spoke about the need for more regulation of the cryptocurrency industry.
43Many supporters of crypto oppose government oversight.
44Now, FTX's collapse may have helped make the case for closer regulation.
45I'm Caty Weaver.