BLUF
FTX sold crypto-coins based on valuing those coins in terms of other crypto-coins—when investors lost faith in crypto-coins and tried to withdraw their money in fiat currencies, e.g., real US dollars, the FTX could not repay them and went bankrupt.Summary
Ben Derico & James Clayton, writing for BBC, notes the following:
- FTX collapsed last month (Nov 2022)
- Investors have lost billions of dollars.
- Sam Bankman-Fried, the former CEO of FTX, based his company in the Bahamas, where taxes and regulations are not as stringent as in the USA.
- Bankman-Fried might have to face fraud charges.
Worth noting the following: CNBC Feb 2020 Warren Buffett: Cryptocurrency 'has no value' (cnbc.com).
References
Recent Runway Posts related to this topic:
- Inside the cryptocurrency scam: 'Frank' explains how European scammers target Australia – The Runway (airforce.gov.au)
- One year on, El Salvador’s Bitcoin experiment has proven a spectacular failure – The Runway (airforce.gov.au)
References from the Web :
- NOV 2022 The FTX collapse, explained – NBC News
- DEC 2022 The companies that helped create 2022’s ‘crypto winter’ – Washington Post
