The collapse this week of one of the world’s most respected crypto exchanges brought back unwelcome memories of the Lehman failure that sparked the global financial crisis.
Jon Deane remembers his boss at JPMorgan screaming across the commodities trading floor as Lehman Brothers, the US bank, plunged towards bankruptcy in January 2008.
This time last week, FTX was managing about $US15.4 billion through its systems. Its 30-year-old founder,was enjoying his time as crypto’s “wunderkind” and venture capitalists were comfortably happy with the company’s latest $US32 billion valuation. Millions of investors have poured money into crypto products. Tantalising “yield” products that pay out high “interest rates” lured investors to one exchange over another. And borrowing programs meant traders could amplify their gains by orders of magnitude.
While the details are murky, the relationship between Bankman-Fried’s FTX and its sister quant-trading firm – also owned by Bankman-Fried and called Alameda Research - is coming under scrutiny. Because there are no rules about what happens to customer money once it’s in the “exchange”, FTX was free to help Alameda do whatever it liked with that money.Binance boss Changpeng “CZ” Zhao has long been an investor in FTX through FTT tokens. Zhao may have caught wind of the relationship betweenLast Sunday, he tweeted he was dumping more than $US500 million of FTT on the market, pointing to the developments at Alameda.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Crypto darling FTX files for bankruptcy as wunderkind CEO exits“I’m really sorry, again, that we ended up here,” founder Sam Bankman-Fried said in a series of tweets.
Read more »
FTX possibly hacked, $895m drained from customer walletsTroubled crypto exchange FTX appears to have been hacked, with $US600 million drained from a series of FTX-linked wallets as the exchange filed for bankruptcy.
Read more »
Crypto giant FTX files for bankruptcyCryptocurrency trading platform FTX has filed for bankruptcy with its former CEO Sam Bankman-Fried reportedly fleeing to Argentina. Mr Bankman-Fried’s private jet has been spotted touching down in the state’s capital after leaving the Bahama’s. FTX attempted to organise a bailout but failed leaving the company scrambling to pay back many of its customers.
Read more »
Is this crypto’s Lehman Brothers moment?The crypto industry is known for dramatic twists, rollercoaster prices and fortunes that appear and disappear overnight. But even by crypto standards, what happened this week was bonkers.
Read more »
Iggy can see $50K in his crypto account. But the collapse of FTX means he can't get it outAustralians who invested in the FTX cryptocurrency exchange are unable to withdraw their funds as the company's local arm goes into voluntary administration.
Read more »
Collapsed crypto exchange guards against hackers as hundreds of millions of dollars disappearAnalysts say assets were moved off the FTX platform in 'suspicious circumstances' as the company reveals it detected unauthorised access.
Read more »