It is alleged senior executives were trading with customer funds through the trading firm Alameda Research and had accumulated losses that exceeded $10 billion. Wow!
The founder and CEO of FTX, Sam Bankman-Fried, has also stepped down as CEO, and is reported to have disappeared along with the CEO of Alameda Research, Caroline Ellison. Who is reportedly also his girlfriend.
Shortly after filing for bankruptcy, the remaining funds within FTX, $600 million, were lost, and claims to have been hacked. Although evidence points to an insider within FTX itself.
Sam Bankman-Fried had recently featured on the cover of Forbes magazine, and had an estimated net worth of $16 billion (now $0).
He was pushing for much stronger regulation within the crypto industry, particularly around decentralised finance (DeFi) – which is trusting technology to transact, rather than trusting individuals and companies. Ironically, DeFi would have saved customers money from Sam Bankman-Fried’s alleged fraud.
Cryptocurrencies run on blockchain technology, which makes transactions transparent and person-to-person (peer-to-peer). Here’s where to learn more about blockchain.