The world’s third-largest cryptocurrency exchange, FTX, filed Bankruptcy this week after a bailout from the larger rival Binance collapsed. FTX started with a $400 million Series C funding round, bringing its valuation to over $32 billion. After ten months, the crypto exchange is staring down the possibility of bankruptcy. After filing bankruptcy, Chief Executive Officer Sam Bankman-Fried resigned from his post and is now being investigated for his role in a multi-billion dollar scandal.
FTX was one of the largest crypto players worldwide as it established itself with multiple mainstream brands, sponsorship partnerships and billions in fundraising. The turmoil at FTX began after CoinDesk reported a leaked balance sheet that showed the Bankman-Fried trading firm was heavily dependent on FTX’s native token.
According to the reports, Bankman-Fried had transferred $10 billion from customer funds to Alameda Research, the trading company of Bankman-Fried. After this, the CEO of Binance, Changopeng Zhao, said the firm would liquidate its holding of FTT due to unspecified ‘recent revelations.
Also Read: How to buy Ethereum in India
On Saturday, the FTX said it had detected unauthorized transactions in which hundreds of millions of dollars of assets moved from the platform in ‘suspicious circumstances.’
The loss of unauthorised transactions is kept secret by FTX, but the reports claimed that it is somewhere about $600 million; however, the company estimated the amount at $1 billion.
In this scenario, the name of Indian-origin Nishad Singh, the Director of Engineering at FTX, also came up. As per the reports, Alameda Research’s CEO, Caroline Ellison, admitted that the top executive company was aware of Bankman-Fried decision to move customer funds to Alameda Research.
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