The introduction of Cryptocurrency was like the discovery of fire or sliced bread. It is a one-of-a-kind, rare, phenomenal digital asset that functions on blockchain technology.
It has completely transformed the way investors look forward to financial independence. This could be seen as a way to freedom from the dictates of central banks and regulations. However, It always took investors on a roller coaster ride. Few of them became ‘instant’ millionaires while others are still in the process.
Since its arrival, cryptocurrencies are going through their worst crisis. Bitcoin faced a straight fall on the face in late 2020 and is yet to recover, the collapse of some so-called ‘stablecoins’ have put a question mark on the crypto industry. To make the industry even more volatile, the giant cryptocurrency exchange failed. Allegations of fraud layered on the FTX case.
When it hit the bottom last year, it was all tears. With the collapse of FTX, the third-largest crypto exchange platform, and other crypto projects, the last year seems to be the darkest hour in the crypto sphere. It is filled with many ‘Hows’, ‘Whys’, and ‘Ifs’!
The Great Fall of FTX and FTT
Sam Bankman-Fried(SBF) co-founded Alameda Research in September 2017, which made profits by hedging crypto assets. Looking at the exponential growth, SBF founded FTX Trading Ltd. (Futures Exchange), an exchange platform for cryptocurrencies. Other than providing exchange services, FTX created its native token, called FTT.
A report revealed, the sister firm Alameda held a large portion of its assets in FTT tokens. After this report, a series of not-so-good events bombarded FTX.
Changpeng Zhao(CZ), CEO - Binance- the leading exchange announced the sale of all of his holdings of FTT. When FTX’s customers found out, they panicked and tried to withdraw their money. FTX could not handle such a massive amount of withdrawals and buckled under market pressures, inching closer to insolvency. When the layers of the case unfolded themselves, another shocking revelation was made. FTX’s bookkeeping system allowed them to secretly shift $10 Billion to Alameda without alerting anyone. Thus, it gradually slipped into bankruptcy, filed in November 2022. In a meager 8 days, the company had Zero valuation. The users were to bear a loss of almost 800 Million. Amongst all the hues and cries one can observe that the death of FTX was majorly because the face behind it misused the technology.
It is not wrong to believe that malicious intent, manipulating data, and unstructured and unauthorized use of finance led to the gradual bankruptcy of the exchange platform....Read More
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Cryptocurrency is a digital or an alternative currency.
There is approx 16.8 million bitcoin currently in circulation.
Its decentralized system is based on blockchain technology.
The question still remains same, will this technology replace the national currency one day?
The possibility of becoming it as the de facto mode of payment for internet users is high.
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