FTX Customers Are Out Billions. Here's What That Means for Crypto Investors.
The biggest news in the financial world in the past two weeks has been the collapse of the previously renowned cryptocurrency exchange FTX. Founded by Sam Bankman-Fried in 2019, the exchange shot up in value after venture capitalists poured billions of dollars into the business. At one point, Bankman-Fried was valued at $16 billion, making him one of the wealthiest people in the world on paper. Now, Bankman-Fried is estimated to have a net worth of zero after FTX collapsed amid allegations that he may have transferred billions in customer funds to cover losses at his hedge fund Alameda Research. Customers who deposited funds at FTX may never get their money back.
Here's why the cryptocurrency exchange FTX imploded and what it means for both FTX customers and crypto investors.
This story is still unfolding and extremely complicated, so here are the nuts and bolts. Bankman-Fried founded and owns two companies: FTX and Alameda Research. FTX is an offshore cryptocurrency exchange based in the Bahamas where people could buy and sell crypto tokens like Bitcoin or Ethereum. Alameda Research is a market-making hedge fund for cryptocurrencies.
Source Fool.com
