#FTXrepayment

FTX was one of the largest cryptocurrency exchanges in the world, founded in 2019 by Sam Bankman-Fried (SBF). The exchange quickly became famous for offering cryptocurrency derivatives, futures, and options trading, as well as innovative services for institutional and retail traders.

FTX Collapse

In November 2022, FTX filed for bankruptcy after it was revealed that its sister company, Alameda Research, was using funds from the exchange's customers to cover losses and risky trades. A financial leak revealed that FTX did not have enough reserves to cover withdrawals, causing a domino effect of panic in the crypto market.

The crisis worsened when Binance, which initially considered buying FTX to rescue it, backed out of the deal after assessing the situation. This led to a financial collapse, and Sam Bankman-Fried was arrested and convicted of financial fraud, accused of embezzling billions of dollars from users.

Impact on the Crypto Market

The FTX scandal has shaken confidence in the sector, resulting in:

• A drop in the prices of cryptocurrencies, including Bitcoin and Ethereum.

• Increased regulation in the crypto market, with governments demanding greater transparency from exchanges.

• An emphasis on self-custody of assets, leading more users to store crypto in personal wallets instead of exchanges.

The FTX case serves as a warning to investors about the risks of trusting funds in centralized platforms without transparent auditing.