.jpg)
First came the Terra collapse. Then the bankruptcies of the centralized lenders. And now the (almost certain) insolvency of FTX, one of the largest cryptocurrency exchanges in the world.
FTX’s collapse has shaken the industry to its core, in part because it is a fundamentally different type of business than a crypto lender like Celsius. FTX is a cryptocurrency exchange. The service it provides is that of a facilitator of trades: they earn a transaction fee for every trade executed by one of their clients. FTX is neither a trading firm nor a lender, so theoretically, they should at all times have access to the equivalent of 100% of their client’s funds.
But we now know that that was not the case due to a dangerously intertwined relationship with FTX’s sister company, the trading firm Alameda Research, and the improper use of FTX’s native cryptocurrency, FTT.
Click here for full details.
