The spectacular collapse of a $30 billion crypto exchange should come as no surprise
Not long ago, FTX was one of the world’s largest trading platforms for cryptocurrencies. Founded in 2019, the Bahamas-based crypto exchange had a meteoric rise to prominence, and was valued at more than US$30 billion earlier this year.
All that has changed in the past two weeks. First, concerns emerged about links between FTX and an asset-trading firm called Alameda Research, including suggestions that customers’ funds have been transferred from FTX to Alameda.
A few days later, rival firm Binance (the biggest crypto exchange) announced it would sell its holdings of FTT tokens, a crypto that reportedly comprises much of Alameda’s assets.
Panicked customers rushed to withdraw funds from FTX, and the company is now on the brink of collapse, with a banner message on its website announcing it is “currently unable to process withdrawals”.
