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(Bloomberg) — The crypto industry descended into chaos last week after a series of fast moving events. The trouble purportedly started after Binance CEO Changpeng Zhao tweeted that the crypto exchange would sell off some of rival exchange FTX’s native token, FTT, due to ‘risk management’ issues. That drove the price of FTT down and fueled a selloff. Soon after, FTX was forced to halt withdrawals from the exchange. CEO Sam Bankman-Fried — or SBF as he’s known — started shopping around for a bailout. Then Bankman-Fried tweeted that the company had found a savior in its former rival, Binance.
But within a day the deal was off. Binance backed out citing due diligence concerns and FTX’s questionable handling of its customers’ funds. Documents were leaked showing FTX was dealing with significant financial difficulties and appeared close to collapse, which apparently it was: FTX soon filed for bankruptcy and Bankman-Fried resigned as his $16 billion dollar fortune evaporated. A spectacular outflow of money from crypto exchanges ensued and Bloomberg reported that federal probes of FTX and SBF were underway.
How did it all go so wrong for FTX and what does this mean for the future of digital-assets? We have the latest updates with Bloomberg reporters Katie Greifeld and Vildana Hajric.
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