There is not a day without some awful news regarding FTX coming to light. Its collapse is something truly colossal, and it is bringing the whole industry down with it. Crypto’s industry confidence is at an all-time low.
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Institutional investors linked to FTX and its sister company, Alameda Research, are still calculating their losses resulting from their exposure to Sam Bankman-Fried’s empire. Let’s look at the latest information about this bankrupt crypto exchange.
Playing with fire
The insolvency of FTX was caused by a lack of liquidity when customers attempted to withdraw funds from the platform. The shortage appears to have been caused by the transfer of $10 billion in client funds from FTX to Alameda Research by the company’s founder, SBF.
— Investro.com (@investrocom) November 25, 2022
SBF remains unrestricted at this moment. Despite the fact that FTX’s 50 largest creditors are claiming $3 billion from the exchange and millions of ordinary investors may never recoup their investments, he has not been charged.
SBF reportedly obtained a $1 billion personal loan from Alameda. Moreover, Nishad Singh, the FTX Director of Engineering, received a $543 million personal loan, and Ryan Salame, the co-CEO of FTX Digital Markets, received $55 million. It was like Christmas for FTX management, but now it’s like a bad dream. But not only for them; for everyone involved in crypto.
SBF donated to politicians
SBF had become the institutional face of crypto, spending most of his time in Washington, where he attempted to influence the direction of regulations. As a result, he gave millions of dollars to elected Democrats. SBF emerged as a major donor to Democratic politicians ahead of the midterm elections on November 8th.
His political action allegedly contributed more than $23 million to the Democratic Party, while the founder of the now-defunct crypto exchange FTX donated $13 million to both the Democrats and Republicans. Donations also occurred less than two weeks before the bankruptcy of FTX.
Bitfront as another exchange will close in 2023
According to an announcement made on Monday, the Japanese social media giant LINE will shut down Bitfront, a cryptocurrency exchange that it created in 2020. Now, LINE will turn its focus away from the exchange and onto its native blockchain and cryptocurrency.
Bitfront is one of a handful of crypto enterprises that have been forced to discontinue operations due to the raging bear market, which is one of the toughest and longest in history. New registrations along with credit card deposits will cease immediately. Luckily, Bitfront’s customers will have until March 31st to withdraw their funds.
“Despite our efforts to overcome the challenges in this rapidly-evolving industry, we have regretfully determined that we need to shut down BITFRONT in order to continue growing the LINE blockchain ecosystem and LINK token economy,” stated the announcement.
Mark Cuban on crypto
— Investro.com (@investrocom) November 21, 2022
Billionaire Mark Cuban has not lost faith. Despite the FTX crash, he maintains his faith in the industry and asserts that there is still a great deal of value in the sector. He thinks that crypto has a role in this world and that one must just see the big picture.
“Separate the signal from the noise. There’s been a lot of people making a lot of mistakes, but it doesn’t change the underlying value,” Cuban said to TMZ.
Cuban explained that as long as consumers have great options in the crypto space, he doesn’t think it’s the end of it. Cuban further said that he thinks jail time is inevitable for Sam Bankman-Fried (SBF), who created this massive scam.
“I don’t know all the details, but if I were him, I’d be afraid of going to jail for a long time. I talked to the guy and thought he was smart. I had no idea he was going to take other people’s money and put it to his personal use,” Cuban said.
FTX collapse is one of the most damaging events of crypto history, that’s for sure. Many other companies failed or were forced to shut down as a result of high exposure to FTX. But when the dust finally settles and the smoke clears, we will hopefully see a new wave of crypto projects.