Viewing a single comment thread. View all comments

JPAnalyst t1_ivy7wxt wrote

Can someone explain to me life I’m 5. What happened? Why it matters? This whole crypto thing is confusing to me.

7

slackboulder t1_ivyafag wrote

FTX was not holding customer money/crypto. They were borrowing it without customer knowledge to make other trades. So when a bank run happened which is when customers run to the bank to take out their money/crypto due to panic from falling prices. FTX was unable to give customers their money/crypto, and led to customers being locked out of their accounts. So now FTX is worth nothing, and there is a lot of people who trusted them who are going to lose everything.

9

JPAnalyst t1_ivyb8a6 wrote

Oh my. This is a s a big deal. It’s like what happened to George Baileys bank in It’s a Wonderful Life, but worse because FTX was cheating/lying. Horrible.

4

slackboulder t1_ivyc4pp wrote

Same thing happened with Voyager and Celsius exchanges. There was a lot of people scamming.

4

[deleted] t1_ivydvvh wrote

[deleted]

0

slackboulder t1_ivye2p5 wrote

It's an exchange, not a bank. They were supposed to be a place to hold/exchange your crypto.

4

[deleted] t1_iw0ec33 wrote

Hopefully people go to jail, but realistically they're probably going to all skate and still be wealthy.

1

TipsyMcStagger317 t1_iw79hsd wrote

Fraud, fraud is what happened. They misappropriated customer funds for their own trading via Alameda, a subsidiary. FTX had no cfo, no regulatory compliance department, etc. it was a bunch of math nerds who did well during bull market and thought they were invincible. Google Caroline Ellison of Alameda, pick the video of your choice - says it all.

2

TipsyMcStagger317 t1_iw7a2k6 wrote

Good news: the downstream impacts should be nominal and contained within more aggressive firms dealing in crypto and that don’t do due diligence.

1

[deleted] t1_ivy97xn wrote

[deleted]

−1

torchma t1_ivzchnc wrote

> Ultimately FTX got into such a pickle that Binance (#1) bought them for likely pennies on the dollar.

How is this being upvoted? Binance PULLED OUT of the deal. That's been the biggest story of the past couple days. How did you get that wrong?

10

JPAnalyst t1_ivy9edz wrote

That helps. Still confusing, but thank you!

1

[deleted] t1_ivyb0b1 wrote

[deleted]

3

Malforus t1_ivyff5a wrote

You missed that Binance was considering providing a lifeline to FTX. Instead they posted information that basically started a bankrun because Binance was supporting FTX and FTT.

Basically instead of throwing a lifeline they hit them with a cement brick.

4

[deleted] t1_ivzg3hh wrote

Is this actually true? Sounds completely illegal and I haven't seen it reported anywhere.

1