FTX Finally Files For Bankruptcy After Binance Refused Bailout

[JollyGood]

Another exchange hits rock bottom. How many more will become big and then end up crashing taking investors funds with them?

FTX has filed for Chapter 11 proceedings today after the company once worth $32 billion has fallen from grace in to collapse. CEO Sam Bankman-Fried resigned from his role but will remain in an advisory position in order to assist the "orderly transition".

The SEC looks to investigate whether Sam Bankman-Fried mishandled or misappropriated customer funds. Things will get more messy before the full facts are revealed.

The PR fallout from this will be highly negative with those new to crypto or just starting to take an interest being the first to change their minds and think crypto is (stereotypically) either unsafe or used for scams.

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[dwminer1]

The collapse of FTX has become a reality and it must be remembered that this could have direct negative consequences for many other projects. As FTX and Alameda begin bankruptcy and reorganization in accordance with Chapter 11, the companies and tokens they invest in are also will face legal and financial problems.

Here is a list of related projects:

[coolcoinz]

By the number of companies connected with them you can easily see how much money they were wasting. You could come to them and say hey' I have a new defi project I want to sell you a stake in my business and you'd get it either in the form of their worthless token or a stable coin that they bought with clients money.
Poor people were depositing their bitcoin there and playing around with positive balance on exchange not knowing that their BTC is long gone because the company barely held anything. You gave them real money and you were getting an IOU and the money was gone into another branch, shell company, investment, sent to Alameda to be leveraged there.

I feel sad that this is impacting bitcoin and some idiot journalists will now say "a bitcoin company went bankrupt, people wanted bitcoin and they got scammed" while it had nothing to do with bitcoin. Bitcoin should be out of this shitstorm as Sam and his company never wanted anything good for BTC. All they wanted to do was pushing defi and their fractional reserve token into the mainstream.

This is going to come to light eventually but I can bet you they were spending some of those "lost" billions on lobbying and bribing in Washington and that's why they're insolvent now.

[BitcoinPanther]

Another exchange hits rock bottom. How many more will become big and then end up crashing taking investors funds with them?

This is another sad day for crypto holder and those people who trusted a centralized exchange to keep their cryptocurrency.  

The SEC looks to investigate whether Sam Bankman-Fried mishandled or misappropriated customer funds. Things will get more messy before the full facts are revealed.

I believe the SEC will find that Sam Bankman-Fried mishandled the customer fund since I read somewhere that Sam Bankman-Fried give $10B (from customer funds) loan to his own firm Almeda Research[1].  That is a clear proof of misappropriation of funds.  His resignation won't save him from any possible lawsuit.


[1] https://www.theverge.com/2022/11/10/23451484/ftx-customer-funds-alameda-research-sam-bankman-fried

[teosanru]

Very sad news for the overall crypto community, honestly this is reducing consumer confidence so much and worst part is that all this is proving governments and authorities absolutely right. They will try to give these reasons to ban cryptos and bring stringent legislation against Cryptos as well. It's so surprising that exchanges keep the backup assets in assets other than the original assets. All of this also promoting monopoly in the market which is very bad too.

[Captain Corporate]

Honestly its not a shock at all. Binance didn't look like they were going to really support them and keep them alive at all, I really doubt that they would that to begin with and the talks didn't look real. This isn't anyone but their fault, there can't be "oh it happened because X happened" or whatever, you have customers funds in your exchange, customers trade, you earn money, there is absolutely no way to make a loss out of this. You either get hacked, or you give money that you do not own, and make a mistake because of that, there is nothing else at all. This is purely CEO's and every other worker that had any say in this fault, and nobody else is responsible and after so much money is lost, I hope that they will get some big punishment, CEO should be even jailed for a while.

[Iroh]

You can’t trust the CEO
You can’t trust the company
You can’t trust the bank

Not your keys, not your coins.
Thoughts and prayers to anyone who had coins on FTX

[Findingnemo]

Kind of surprised, probably CZ started to think like Elon?

Binance niw stands as the only big exchange but this can be a reason for the people to start realising and never ever trust the centralized exchanges and also bring the decentralisation into the reality in the trading as well.

[Victorik]

This is happening at a very bad time. The market has been down for a long time now, and just when things were getting a little bit better, then this news.
It's really not good at all. Many newcomers who are just beginning to get interested in cryptocurrency will definitely be having a second thoughts.
I feel very bad for the investors also.

[serjent05]

Kind of surprised, probably CZ started to think like Elon?

Binance niw stands as the only big exchange but this can be a reason for the people to start realising and never ever trust the centralized exchanges and also bring the decentralisation into the reality in the trading as well.

People are capable of easily forgetting important events, so I think the majority of people who have their coins on exchanges won't bother moving their funds from the exchange to their controlled wallet.  Besides Binance, being the only big exchange, will cater more trust from people.  We (the vigilant ones)  all know it isn't safe to store our coins on exchanges but many people aren't like us. So they will stay stubborn and keep their cryptocurrency in exchanges.

[cheezcarls]

This is happening at a very bad time. The market has been down for a long time now, and just when things were getting a little bit better, then this news.
It's really not good at all. Many newcomers who are just beginning to get interested in cryptocurrency will definitely be having a second thoughts.
I feel very bad for the investors also.

So looks like the chances of bull run this December isn't gonna be likely considering this latest happening of FTX's bankruptcy. This is why I would never going to store my crypto in exchanges. Not even in Binance even if it's so popular and widely used.

Slowly but surely, CZ is starting to take down big competitors like FTX. So I just don't know who's next on the list? Time will tell.

[franky1]

things to note.
the coins "loaned" to another company.. are gone.. they will be written off as a fiat amount which creditors will get pennies on the dollar
usually liquidation companies(like SBF business plan was), was to shift good assets out and kill off the dead wood

SBF also resigned before declaring bankruptcy. which technically means he is personally not part of the bankruptcy. just a PAID adviser.
whereby he is using this event to kill off all the dead wood of all the failed busineses he bought up and raided over the last couple years



and so he can continue to set up and be CEO of other companies(usually in bankruptcy the running CEO cant then run as CEO of businesses for X years)

it doesnt seem like he is taking personal blame financially, professionally
..the captain did not go down with the ship

[harapan]

This is happening at a very bad time. The market has been down for a long time now, and just when things were getting a little bit better, then this news.
It's really not good at all. Many newcomers who are just beginning to get interested in cryptocurrency will definitely be having a second thoughts.
I feel very bad for the investors also.

So looks like the chances of bull run this December isn't gonna be likely considering this latest happening of FTX's bankruptcy. This is why I would never going to store my crypto in exchanges. Not even in Binance even if it's so popular and widely used.

Slowly but surely, CZ is starting to take down big competitors like FTX. So I just don't know who's next on the list? Time will tell.

Imagine the second worlds biggest crypto exchange going bankrupt just with a decision from Binance owner CZ.
I read MT. Gox also was even has worst experience than this current exchange outcomes.
People and friends are giving advice to leave crypto as a result of these recent outcomes bin the past days. Its also a pity for those who have both retirement plans and long term saving stored up in FTX, at least they should have had the chance to stop withdrawal but they didn't why? In the history of crypto it will be a sad day to recall. CZ doesn't know he has killed a lot of people, sent million's and billion's of people also to be depressed

[KingsDen]

ONLY BINANCE

Do you think that there is a looming danger? If in few years time binance successfully becomes the only reputable and popular exchange in the world. Do you think that the monopoly will not affect the cryptocurrency industry ?
I sense that it will be a very big problem because only CZ could make some drastical decisions that may affect or change the direction of the crypto market at any time.
In a nutshell he could single-handedly manipulate the market and bitcoin inclusive.

How many decentralized exchanges are set for this war?

[Lak93xy]

An ugly situation. Hopefully, it gets solved and not everyone ends up in a ditch.

It really depends on what they decide to do with the assets, whether to liquidate now or later.

[_BlackStar]

-snip-

Something like this was unimaginable before, but has been warned by anyone who really cares about how things are changing rapidly in crypto. CZ is currently cited as one of the main actors in FTX's collapse, but either way it would be wild to call it having that much power to bring down its other rivals.

Whatever the case, have the principle that nothing is truly secure in crypto especially about centralized exchanges. So I really don't think much of anything that might have created new drama for crypto, in fact we still want to maintain optimism on bitcoin rather than overthinking CZ and his decisions.

[jakdanyel]

This event scared not only the new investor, but even the old investors. This is really shocking news. No one would have thought that there would be such a bankruptcy situation. The new investors will no longer be interested in giving advice about cryptocurrencies. I hope that this bankruptcy event will not cause a huge decline in the crypto currency market. Otherwise, it will be difficult for the market, which is already in a bear market, to recover.

[Darker45]

The inevitable has finally happened!

This is going to have a massive effect in the entire crypto industry and probably even outside of it. Within the FTX group alone, there are already more than 130 companies and affiliated companies that are falling down.

Outside of this huge FTX group, there are also more than a hundred that will be severely affected. This is not even counting individual partners and individual fund holders in any of the FTX platforms and those platforms that are heavily invested in FTX.

Needless to say, this will cause a massive domino effect that would see the entire crypto industry losing trust and confidence among individuals, institutions, and governments.

And all this happens just when the market has already begun to see some nice improvements. Talking of bad timing!

[hatshepsut93]

Another exchange hits rock bottom. How many more will become big and then end up crashing taking investors funds with them?

How many years has it been since crypto scams have been a thing? 8? 9? And there's no sign of it all coming to an end anytime soon, because people actually enjoy this one big gambling device - there's a lot of time for high risk high reward gambling, and then there are some periods of cooling off when the market implodes, but eventually it all starts over again, as people like to believe that the next bull run will be big and bring the promised revolution.

Things like hiyps and ponzi schemes exist to this day, and there are fools who engage with them despite the warnings of the professionals, so altcoins and scammy exchanges can be a thing for a long time too.

[JollyGood]

Honestly its not a shock at all. Binance didn't look like they were going to really support them and keep them alive at all, I really doubt that they would that to begin with and the talks didn't look real. This isn't anyone but their fault, there can't be "oh it happened because X happened" or whatever, you have customers funds in your exchange, customers trade, you earn money, there is absolutely no way to make a loss out of this. You either get hacked, or you give money that you do not own, and make a mistake because of that, there is nothing else at all. This is purely CEO's and every other worker that had any say in this fault, and nobody else is responsible and after so much money is lost, I hope that they will get some big punishment, CEO should be even jailed for a while.

In a way it suits Binance if serious competitors are moved out of the way therefore the only way Binance would have gained something is by taking over FTX rather than loan it funds. Having said that, Binance allege there was $8 billion of investor funds misappropriated from FTX therefore like any venture firm should avoid getting involved. FTX denied misappropriating customer funds but the fact is has filed for bankruptcy means something went seriosuly wrong.

Kind of surprised, probably CZ started to think like Elon?

Binance niw stands as the only big exchange but this can be a reason for the people to start realising and never ever trust the centralized exchanges and also bring the decentralisation into the reality in the trading as well.

The only businesses and people that do not seem to want widespread usage of decentralised exchanges are the big centralised exchanges and people that own them. They make phenomenal amounts of money in commission and these exchanges when they go bust leave behind a trail of human suffering mostly in the form of ordinary investors cutting back on their weekly family expenses instead using their salaries to buy crypto and make the fatal mistake of trusting those exchanges to hold their crypto.