With the fate of cryptocurrency exchange FTX hanging in the balance, several of cryptos biggest names took to social media to make clear if they had any exposure to the exchange, its native token FTT, and its trading subsidiary, Alameda Research. The SEC and DOJ are now investigating the crypto platform FTX.
Last week, the CEO of former CEO Sam Bankman-Fried left his post as CEO, and FTX announced it was filing for Chapter 11 bankruptcy, which allows the firm to reorganize and keep its operations going while coming up with a plan to repay the creditors of the firm. Sam Bankman-Frieds cryptocurrency exchange, FTX, filed for Chapter 11 protection on Nov. 11 – the culmination of a steady drip of bad news about the company, and an bank run in which about $6 billion of customers walked away.
His cryptocurrency exchange FTX is a company owned by Sam Bankman-Fried, Mr. Bankman-Fried told two investors, and he plans on running it with very little supervision. Judging from a business kept by the bankman-Frieds, former billionaire Sam Bankman-Fried, the founder of the crypto-exchange FTX. Bankman-Frieds FTX is shining a light on a murky industry that is usually dark.
The collapse of FTX was preceded by the decision to loan billions of dollars worth of customers assets to finance risky bets at Bankman-Frieds cryptocurrency hedge fund, Alameda, The Wall Street Journal reported on Thursday. FTX, once valued at $32 billion, crashed within days after Binances CEO, the head of rival firm Binance, said that Binance will liquidate its own FTT coin.
On Saturday, FTX said it was looking into whether any cryptocurrency assets were stolen. Crypto risk management company Elliptic said $473m worth of cryptocurrency assets appeared to be taken by FTX.
Digital assets trading group CoinShares also disclosed limited exposure to FTX in a statement posted to Twitter. While Genesis, an institutional trading company, has a business relationship with FTX, it also clarified it does not have a current credit facility relationship with either FTX or Alameda Research.
Keep is contrasting this to FTX, which has reportedly lent billions of dollars of client funds to Alameda Research, the trading company that is also controlled by Sam Bankman-Fried, a former FTX executive. Crypto-lender Nexo was also able to avoid potentially losing $219 million by pulling all its balances out of FTXs exchange. Part of what set off the spiral in FTX was the news that the biggest holding at Alameda Research was a FTX token, the FTT, creating a situation in which it appeared that the firm was using something like its own shares as collateral.
