Four years ago today, one article started the fall of FTX.
Nov 2, 2022: CoinDesk published Alameda Research's balance sheet. $14.6B in assets, but the biggest line was $3.66B of "unlocked FTT", plus another $2.16B of "FTT collateral". A big part of the empire was backed by a token FTX issued itself.
Within days traders dumped $FTT, customers rushed to withdraw, and FTX couldn't pay. It filed for bankruptcy on Nov 11, 2022, nine days after the article.
Exactly one year later, on Nov 2, 2023, Sam Bankman-Fried was found guilty on all 7 counts. In March 2024 he got 25 years.
The lesson still holds: if a company's balance sheet is mostly its own token, that value is only as real as the next buyer. Check proof of reserves, don't keep everything on one platform, and self-custody what you aren't trading.
#CryptoHistory #FTX #CryptoLessons
Not financial advice.
Nov 2, 2022: CoinDesk published Alameda Research's balance sheet. $14.6B in assets, but the biggest line was $3.66B of "unlocked FTT", plus another $2.16B of "FTT collateral". A big part of the empire was backed by a token FTX issued itself.
Within days traders dumped $FTT, customers rushed to withdraw, and FTX couldn't pay. It filed for bankruptcy on Nov 11, 2022, nine days after the article.
Exactly one year later, on Nov 2, 2023, Sam Bankman-Fried was found guilty on all 7 counts. In March 2024 he got 25 years.
The lesson still holds: if a company's balance sheet is mostly its own token, that value is only as real as the next buyer. Check proof of reserves, don't keep everything on one platform, and self-custody what you aren't trading.
#CryptoHistory #FTX #CryptoLessons
Not financial advice.
