Almost all crypto-related sites and news outlets have reported about the crash of FTX; it’s nearly impossible to miss. And three months after the event, its aftereffects are still seen in the crypto market.
But what happened to FTX, and should you be worried about it? Here’s what you need to know about the issue.
Brief Background of FTX
FTX is a digital exchange platform established in 2019 where people can buy, sell, and trade their digital assets like ETH and Bitcoin. Through aggressive marketing strategies, celebrity endorsements, and low trading fees, it quickly rose to fame and became one of the most popular platforms in the crypto market.
What Happened
While FTX seemed high and mighty, it only took ten days for the famous exchange to fall to its knees.
Their downfall started on November 2, 2022. Crypto news site CoinDesk reported that the trading firm Alameda Research held an estimated value of $5 billion worth of FTT, FTX’s native token. Alameda was owned and operated by Sam Bankman-Fried, the same person behind FTX, making them sister companies.
Additionally, the report revealed that their declared assets were all made up and all based on FTT, even its investment foundation. This led to several questions regarding the firm’s stability and the founder’s handling of funds, among others.
Shortly after, FTX’s rival Binance sold off all its FTT assets valued at around 500 million. The exchange platform tried to liquidize its assets to recover its standing. However, this led to the freezing of its assets in the Bahamas and ended with filing for chapter 11 bankruptcy in the US.
Bankman-Fried, the face behind FTX, was arrested for fraud and embezzlement but was subsequently released with a bail of $250 million. The class-action lawsuit also named several big names who allegedly aided the former CEO.
The Aftermath
FTX’s collapse severely damaged the company and the crypto industry. Current FTX CEO John Ray continues to work on damage control and trying to rebuild the exchange’s reputation.
Outside FTX, many exchanges saw a dip in market price due to this crisis. This included Binance, Ethereum, and Tether. Many investors lost money as well, with withdrawals from the platform still unavailable at the moment.
Diminishing consumer trust and heightened skepticism also prevailed after the downfall of FTX, further extending the “crypto winter.” Furthermore, the events that led to the FTX crisis encourage regulation laws to reduce the risks that the crypto market poses.
No Concerns with the ETHi Token
With everything that happened with FTX, one thing’s for sure: everyone should choose a reliable crypto token to invest in. The ETHi token gives investors the security needed for confident investment, as we’re based on lease-to-own US real estate. Investing in ETHi not only gives you a secure space in the market, but you also become a passive real estate investor.
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