Table of Contents 94e1i
Cryptocurrency brokerages are famous for allowing investments in this type of financial asset, but when a large company ends up involved in controversies, insecurity starts to haunt the market. The news of the time is that the FTX is involved in a bankruptcy filing case. 3f3m1n
This happened after the website CoinDesk discover that a fund involving your subsidiary AlamedaResearch🇧🇷 From one day to the next, the value declared by the company was no longer available and investors did not know what to do. The big problem is that more companies ended up being affected and a big revolution in the exchange started to happen. Understand everything right now.
FTX filed for bankruptcy after issue 4y5u1a
Sam Bankman Fried owns two cryptocurrency exchanges that caused a big problem in this market. According to an article published by the website CoinDesk on November 02, 2022, the AlamedaResearch assumed it had $5 billion in FTT, a currency created just for sale to FTX investors
At the same time, as belonging to the FTX, the same amount (and the virtual currencies) was ed for in the company's vault. But the $5 billion figure was not backed by fiat currencies or other cryptocurrencies, and the CEO assumed the company did not have enough asset value to meet customer demand.
Despite declaring that it had all this value, nothing was “for real”. It was as if the credit only existed in theory and if someone requested the withdrawal, the amount did not exist (and therefore could not be withdrawn). As a consequence, other brokerages that had investments in FTT had their operations affected.
On November 12, 2022, the FTX requested that the Chapter 11 (US court-supervised reorganization proceeding) was initiated on behalf of the company. In practice, under US law, the court sets a date for a business restructuring plan to be filed and the company to continue operating. But that also means assuming that all attempts at recovery have gone wrong and the company had to ask for help in order not to go out of business.
Cryptocurrency exchanges started crashing 1j6c42
Judicial recovery processes are not new in the financial market, but when it occurs with a company like FTX — one of the biggest when talking about cryptocurrencies — is because something very serious has happened and a problem is about to hit everyone in the market.
It is as if a company that manufactures raw materials for several other companies had this problem: the entire market could suffer from the consequences of poor management. These are the companies connected with the FTX e AlamedaResearch:
A the blockf was one of the first to feel this: the cryptocurrency lending company also requested that bankruptcy proceedings be initiated on its behalf. This is the first sign that the company is about to go bankrupt. A matter of The Wall Street Journal stressed that only the blockf had $14 billion to $20 billion in customer funds in 2021, with approximately $7,5 billion in the borrowing system. It is not yet known what the updated value of the company is after a “significant exposure” with the break in the FTX.
Another cryptocurrency exchange that found itself in trouble was genesis, which had to stop all withdrawals after an “abnormal demand for cash withdrawals”. THE Gemini, specializing in the staking (which focuses on earning ive income through the purchase of cryptocurrencies), has temporarily suspended all its activities involving the Gemini Earn.
There are still many smaller companies that may have been affected and are not coming forward. The request for judicial recovery also affected the Liquid and Salt, as companies had to stop their activities for Chapter 11 of the FTX was carried out. It is an insecurity that must be felt even more in the first months of 2023.
Possible case of money theft at FTX 1x3m1y
According to Elliptic, there was a case of virtual attack on the FTX which resulted in a write-off of US$ 500 million in assets in the company's coffers. Bankman–Fried🇧🇷 Whether this would have been the main reason for the cryptocurrency broker to file for bankruptcy remains to be seen, but the hacker still managed to drain wallets for days and the stolen amount was invested in ether, another cryptocurrency.
Now is the moment for the company to solve problems. In November 2022, a securities regulator froze the company's assets. FTX and the company also stopped advising its customers to make deposits. In addition to other civil actions, famous names such as Tom Brady, Larry David, Naomi Osaka, Shaquille O'Neal and Stephen Curry are being investigated for promoting FTX in the past. The outcome of this story is still unknown.
What happened to the customers' money? 6e2661
After the CEO resigned, many people wondered what would happen to the value of investments made in cryptocurrencies. The company stopped processing withdrawals on the same day it requested the opening of the judicial recovery process, and its more than 5 million customers fear that the asset value will never be withdrawn.
Many people even had their requests processed in relation to cryptocurrencies, but the amount was never deposited in the bank . A client with investments in Ethereum, Bitcoin and a collection of NFTs from the Golden Warriors team fears that investments that reach $11 will never be recovered.
Customers Travel Digital e Celsius Network, two other cryptocurrency brokerages that went bankrupt in early 2022, until today they no longer have access to their s and even less access to investments. The same can happen to anyone who has an at FTX.
Have you been or do you know someone affected by the problem of FTX? tell us Comment!
See also other features
Cryptocurrencies fall: why are they devaluing and what is the expectation for the future?
With information: Investopedia l Bloomberg l Bloomberg Line
