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FTX Firm's Bankruptcy Review by Helprin Management Tokyo, Japan

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FTX Firm's Bankruptcy Review by Helprin Management Tokyo, Japan

FTX Firm's Bankruptcy Review by Helprin Management Tokyo, Japan


Samuel Bankman-Fried (SBF), the CEO and founder of The Futures Exchange (FTX), resigned from his post as well as the company filed for Chapter 11 bankruptcy, which generated headlines. Almost instantly, the former CEO lost 94% of his total wealth.


Helprin Management Tokyo Japan examines the FTX event in light of its implications for financial technology's position as one of the top exchanges for cryptocurrencies in the future. When it comes to investing and money management, investors may learn a lot from what happened to SBF and FTX.


Samantha Bankman-Fried


California-born The Massachusetts Institute of Technology awarded Sam Bankman-Fried a physics degree along with a minor in mathematics (MIT). SBF started Alameda Research in 2017 after employment at the trade company Jane Street and the nonprofit sector, according to Helprin Management Tokyo Japan. A cryptocurrency exchange platform with cutting-edge features and minimal trading costs was launched by SBF and his team in 2019 as FTX. Bloomberg claims that just in 2020, the aggregate net profit of both companies was $1.350 billion. SBF was a significant political donor by the age of 30 and had a peak net worth of $26 billion.


He was regarded as the richest person in cryptocurrency before the sad occurrence destroyed all of his wealth.


According to the Bloomberg Billionaires Index, he will not be materially wealthy until November 11, 2022.


How did FTX fare?


SBF created headlines with his various actions, including obtaining the naming rights to an arena and hiring celebrities to promote FTX. The crypto industry was in his hands. What transpired then?


Axel x FTT


The stability of SBF's empire was questioned at the start of November by Coin Desk, a hugely prominent crypto publication. The investigation revealed that, despite Alameda Research and FTX being independent legal businesses, the majority of Alameda's assets were held in FTT, a cryptocurrency that FTX had created. Although technically there is nothing illegal with doing it, the fact put into doubt the FTX's liquidity.


Things worsened a few days later when Binance CEO Change Zhao (CZ) sold around $500,000,000 worth of FTT and drove more customers to leave. Within three days of the consumers' panic selling, FTX received $6 billion in withdrawal requests.


FXT and Finance


The platform struggled to meet the sudden demand, which reduced FTT's value by 32%. Only until Finance, the cryptocurrency exchange with the highest daily trading volume in the world, made the unexpected statement on November 8 that it would rescue FTX by purchasing it did the value start to rise. Regarding the transaction, investors had high hopes.


On November 9, Finance declared that it was not interested in FTX owing to due diligence findings of improper management of customer assets and potential federal investigations.


Reasons why FTX failed


SBF said on Twitter that he had made mistakes, attributing the collapse of FTX to erroneous debt projections as well as a significant number of customer withdrawals. Unnamed sources told Reuters, however, that SBF transferred money from FTX to Alameda earlier in 2022 after the latter suffered a string of losses. He apparently kept it a secret, and FTX declined to offer any other information.


How this affects the cryptocurrency industry


Following thorough diligence, FTX was backed by prominent investors like Sequoia Capital, Soft Bank Vision Fund, Black Rock, Tiger Global, and others. In addition, Coin Desk claims that SBF's inner circle managed the business activities with him in the Bahamas.


Some workers allegedly invested their whole life savings in FTX in the belief that everything would be alright, according to their unnamed source.


After a $2 trillion blow to the industry in May, the market value of cryptocurrencies is now down 12% as a result of the news of FTX. Although some think that FTX is only one exchange and doesn't affect the rest of the business, crypto investors worry that a crash is about to happen.


Elon Musk tweeted that he didn't think SBF had $3 billion in liquid assets available at the time it made the offer to buy Twitter.


Bottomline


Financial technology still has a long way to go, and it needs the full support of investors and other business makers. However, due to the recent market movements, cryptocurrency and blockchain investments have become riskier as more players have entered the field. To some investors, FTX’s downfall casts a shadow of doubt about the longevity of the crypto industry.


Helprin Management Tokyo Japan believes in sufficient investment portfolio diversification, so the company’s financial managers will ensure every client has a suitable variety. If you recover your assets from FTX, you could use them to invest with professional financial advisors for better growth and profits.




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