How collapse FTX and ALAMEDA Research will affect crypto industry

A couple of months ago, it was difficult to assume that the extensive and fast-growing FTX business empire would collapse, and its founder-Sam Bankman-Fried (SBF)-will lose its multi-millionaire state in a record time.

FORKLOG figured out the reasons for the collapse of one of the largest cryptocurrency exchanges and appreciated the potential consequences of what is happening for the industry.

• The root cause of the collapse of the SBF business imperia was the high-risk operations of the Alameda Research trading company, which were performed at the expense of client funds on the FTX exchange.
• The opacity of management accounting, poor risk management and dubious investments caused a huge “hole” in the balance sheet and subsequent bankruptcy of once prosperous firms.
• The collapse of the FTX and ALAMEDA negatively affected many other industry companies and the general state of the market, which is unlikely to recover soon after what happened.

The illusion of dizzying success

The founder of the FTX exchange and AlaMeda Research Sam Bankman-Frida, by the age of 30, entered the top 100 influential people according to Time and took the second line of the rating of the richest representatives of the blockchain and cryptocurrency from Forbes.

In the summer of 2021, FTX attracted $ 900 million funding, the volume of which was subsequently increased to $ 1 billion. In January 2022, the exchange received $ 400 million under the round of the C series, and the company’s rating reached $ 32 billion.

Then SBF was estimated at $ 24 billion, and his plans were truly distant. For example, Bankman-Fried did not exclude the likelihood of buying Goldman Sachs and Cme Group. But only after the exchange he led to overtake competitors – Coinbase and Binance.

The head of FTX promoted the platform as a reliable storage not only among external users, but also in the team. As a result, many employees deposited a salary to the exchange immediately after it was received.

Employees bonuses usually consisted of FTX and Utility Tokens of the Exchange (FTT), which were also placed on one of the world’s largest crypto platforms.

In October 2021, the company bought a share belonging to Binance. According to the insider, Bankman-Fried and the director of the product ramp Arra invited employees to purchase stocks at a 50% discount.

The leadership represented these investments as an “amazing opportunity”, which “100%” in the coming years will grow 4-5 times.

Indeed, how can you doubt the stability of the company’s position, which hires new employees against the background of widespread abbreviations?

who ftx IS Going to Keep Growing as Others Cut Jobs

– SBF (@sbf_ftx) June 6, 2022

Business empire was rapidly growing thanks to the absorptions of new companies and portfolio investments.

We list only a few significant transactions of the last months:

• In May, Emergent Fidelity Technologies associated with SBF became the owner of a 7.6% share of Robinhood. The quotes of the shares of the online Broker reacted to the purchase with rapid growth;
• The next month, the FTX absorbed the Canadian adjustable crypto platform Bitvo;
• The American unit – FTX US – in July, concluded an agreement on the provision of a renewable loan with Blockfi $ 400 million with the possibility of buying a landing platform. Shortly before this, a credit line for $ 250 million was reached with FTX;
• In September, the FTX Ventures Investment Fund announced the acquisition of a 30% shares of the founded Anthony Scaramucci Skybridge Capital.

In August, Bloomberg sources reported the interest of Sam Bankman-Frida for buying a Huobi crypto-tank. However, he later denied this information.

Bankman-Fried and top managers of his business empire characterized the desire to “help” problem companies. For example, in June, SBF said that Alameda Research is ready to support participants in the cryptocurrency market “even if it is to the detriment of the company itself”.

In September, the head of the FTX hinted to spend about a billion dollars on the readiness to spend on cryptocurrency companies and projects. In the summer, the companies associated with it directed a similar amount to support the industry.

At the end of the same month, FTX US won the Voyager Digital assets selling assets, offering about $ 1.4 billion. Then the American unit decided to return 72% of the amount of their assets to the customers of a bankrupt lender.

Handing the money to the right and left, Sam Bankman-Fried sometimes complained that other giants of digital assets are indifferent to weakened companies and do not save them.

With regard to stablecoin, the metric also collapsed to zero with ~ $ 700-800 million, which were observed in mid-October.

Similar dynamics demonstrated reserves in the first cryptocurrency – from 108,000 BTC at the end of March, the balance decreased to almost zero. The trend was formed immediately after the collapse of the terra ecosystem.

Against the background of the FTX collapse, a record outflow of bitcoins from the balance sheets of exchanges to cold wallets was observed. The monthly pace reached 106,000 BTC.

Typically, moving coins from exchanges to non -cocked wallets is a signal of investors’ confidence in the long -term prospects of digital gold. This time the process is due to the loss of confidence in the storage of bitcoins on centralized exchanges. The trend is confirmed by a surge in sales of hardware wallets Ledger and Trezor.

“FTX problems have become an extremely difficult event for the market, with attacks on quotes, the trust of investors and the consequences that have yet to be evaluated,” concluded Glassnode experts.

Later, Nansen analysts based on onchain-data revealed that about 86% FTT (280 million from the initial emission of 350 million) were originally controlled by Bitcoin tenge and Alameda Research. The latter acted as one of the first liquidity suppliers for FTX in May 2019.

All exchange tokens, including most unsaturated ones, deposited to the address with the three -year sowing of the trading company as the only beneficiary.

According to analysts, this led to limiting the liquidity of tokens, which made them susceptible to manipulations.

In the conditions of a bull rally of 2021, when the price of FTT took off from $ 0.1 to $ 84, the affiliated organizations decided not to “not sell to the market”, but to use tokens as security for borrowing.

Bankman-Frida trading company directed the received funds for the Utility Token Pampu and, as a result, increase the possible leverage.

This scheme worked until the Terra collapse of the market fall in June 2022. With the cessation of the activities of firms such as Three Arrows Capital and Celsius, which were related to Genesis Trading, Alameda, probably collided with Delaverida and the liquidity crisis.

Problems could be solved by selling FTT for cash. A side effect would be a drop in the price of the asset and “infection” ftx.

Onchain-data showed a transfer of tokens in May-June to a wallet of the exchange with a total value of ~ $ 4 billion with the subsequent possible loan for a similar amount, confirmed by the sources of The Wall Street Journal.

Experts admitted that emergency funding received by a trading company could consist of FTX client funds.

WSJ, citing financial documents, reported that Bankman-Fried sold $ 300 million in the company for ransom of shares belonging to Binance.

In October 2021, FTX attracted $ 420 million as part of the round of financing of the B-1 series. It was reported that capital will be directed to business development, strategic investment and expansion of the list of licenses.

According to WSJ, Bankman Fried personally received three quarters of the funds raised, which realized part of his share in the company. The interlocutors of the publication noted that then the founder of the FTX called the transaction by partial reimbursement of its costs for the reverse ransom of the shares belonging to Binance. The corresponding deal was carried out in July 2021.

Problems opened on November 6, 2022. It was then that CEO Binance Chanpen Zhao decided to get rid of FTT, leaving the portfolio investment in FTX.

According to the recollections of the managing partner of Hack VC and the co-founder of Dragonfly Capital Alexander Pak, the “catastrophic” tendency to risk at Sam Bankman-Frida manifested before the base of the platform.

“It was clear four years ago – the guy hid serious things and very much risked other people’s money. Now he seems to have done the same on a more grand catastrophic scale, ”said the co -founder of Dragonfly.

Also, according to Pak, SBF never showed at potential investors accounting books, in which “everything bad happened”.

Unlinking goods

Soon Chanpeng Zhao published a letter to employees in which he called for refraining from trade ftt.

“FTX falling is bad for everyone in the industry. Do not consider it as “victory for us”. User trust has seriously shaken. Regulators will check the exchanges even more thoroughly. It will be more difficult to get licenses around the world, ”he added.

Then followed the refusal to buy from FTX. Binance representatives said they could not solve the problems that have arisen from the platform.

“As a result of a comprehensive corporate audit, as well as in connection with the latest news reports on incorrect handling of client funds and alleged investigations of American agencies, we decided that we would refuse to acquire FTX.com, ”the company said.

By that time, FTT has been in price by 90%-from the moment of publication of the tweet Zhao about the “drain” of the Utility-Token competitor has passed only three days.

After BINANCE refused to buy the platform, the founder of Tron Foundation Justin San said that together with FTX “develops a solution that will allow you to start moving forward”.

In a conversation with Bloomberg journalist Tom Mackenzie, the Apologist Tron emphasized that he was ready to provide “billional aid” of a drowning cryptocurrency exchange.

Against the background of what is happening, information appeared on the SEC and CFTC investigations regarding the FTX relationship with its American unit and Alameda Research.

The regulators were interested in how much the FTX and Alameda Research business operations were involved in the funds of the exchange customers, the composition of the investors’ base, the degree of segregation of accounts, the structure of ownership of legal entities, their financial relations, as well as the intersection of the leadership and the board of directors on personalities.

Sam Bankman-Fried decided to give excited participants in the “Sedding” market. He wrote that the cost of FTX assets allegedly exceeds the obligations to customers, and the liquidity crisis did not affect the American division of the cryptocurrency exchange.

SBF also admitted that he was tormented by reproaches of conscience for the current situation.

“I am sorry, this is the most important. I screwed up and had to do better. […] my hands were connected due to a possible transaction with Binance; I was not particularly allowed to speak publicly. But, of course, this is on my conscience that we generally came to this, ”he wrote.

Bankman-Fried added that the exchange is not insolvent. However, due to the incorrect assessment of the margin of customers, she had difficulties.

But WSJ sources have found that the cause of the platform collapse was the provision of FTX Client tools Alameda Research to finance risky operations.

According to them, at meetings with Sam investors, Bankman-Fried said that Alameda Research had outstanded debt to FTX in the amount of $ 10 billion.

The publication reminded of Bankman-Frida’s statement of November 7. He argued that FTX does not invest customer funds even in such reliable assets as US government bonds. Subsequently, the tweet was deleted.

According to WSJ, Alameda Research earned on arbitration, market maker and profitable farm.

The rage of regulators

It is not surprising that the regulators of various countries closely watched what was happening and prepared for decisive measures.

Already on November 11, the Bahamas Securities Commission blocked the assets of a subsidiary of a subsidiary – FTX Digital Markets (FDM) and affiliated legal entities, and also suspended the company’s license in the country.

The Japanese Financial Services Agency ordered the local FTX exchange unit to suspend operations and go to CLOSE-ALY mode .

The Turkish division of the company reported plans to convert user balance in the lyre in a ratio of 1: 1 for subsequent sending to bank accounts.

CySEC financial regulator has suspended the FTX EU LTD license, thanks to which the platform could serve the European economic zone.

At the request of law enforcement agencies, Tether Limited has blocked 46 370 701 USDT on Tron’s blockchain, belonging to FTX.

“We were ordered to freeze the assets for the duration of the investigation,” commented Coindesk by representatives of the issuer Stablecoin.

This is the first time that the freezing touched the funds of the cryptocurrency.

In the light of problems with FTX, the head of the US Department of Finance, Janet Yellen, announced the need to “very careful regulation” of the crypto industry, which has not yet been so closely intertwined with the traditional financial system.

Member of the House of Representatives Patrick McGenry said that the US Congress is studying the role of Binance in a sudden collapse of a competitor. According to him, the influence of public statements by Zhao on the current situation will be in the focus of the hearings in December.

“This is a serious and major event,” the congressman emphasized.

The head of Binance himself announced the joint work of cryptos with politicians and regulators.

“The association will provide communication with the regulatory authorities and maintain advanced practices in the industry, including ensuring transparency and confirmation of reserves,” he said.

Representatives of the exchange confirmed the discussion of her role in the collapse of FTX with institutions from many countries.

Collapse

Bankruptcy

The logical outcome of this whole story was the FTX Group submitted a statement of insolvency in accordance with Chapter 11 of the US Code of Bankruptcy and the resignation of Bankman-Frid. The latter was replaced by John Ray III, who previously engaged in the restructuring of the infamous Energy company Enron.

Bitcoin reacted with a fall to the marks in the region of $ 16,300.

From court documents, it turned out that the number of FTX creditors may exceed a million. The structure proposed to consider cases for all 130 affiliated organizations, including Alameda Research, as part of a single process, and not individually in each case.

The infographic below depicts part of the investment objects of the SBF business imperia. The full list of companies is presented in BlockWorks tweets.

Alameda Research portfolio and rounds in which she participated can be viewed on the Cryptoraank service.

Among the FTX investors are SoftBank, Temasek Holdings, BlackRock, Ontario Pension Fund, Paradigm, Tiger Global and other famous companies.

Meanwhile, the Bahamas court approved the temporary liquidators of FTX Digital Markets. The local securities commission transferred all FDM assets to the wallet controlled by it.

In turn, the subsidiary of FTX submitted a statement to the Court of the Southern District of New York in accordance with Chapter 15 of the US Code of Bankruptcy.

According to the law, such a step facilitates the consideration of insolvency cases related to assets and legal entities in more than one jurisdiction.

Chapter 15 may protect FDM from confiscation of assets in the territory of the states during the liquidation in the Bahamsk Islands.

Against the backdrop of all this confusion, the new CEO FTX accused Sam Bankman-Frida and other ex-heads of the exchange of hiding the illegal use of client funds and the “Secret release of Alameda Research from some aspects of the auto-line protocol” on the platform.

“Never in my career I have seen such a complete failure of corporate control and the absolute lack of reliable financial information,” John Ray described the state of affairs.

He noted that a large one, not only in scale of the crypto industry, did not have an accounting department. These services were outsourcing.

“FTX Group did not have centralized monetary control. Procedure violations in money management included the absence of an accurate list of bank accounts and persons who signed it, ”Ray added.

Other, even more interesting details were revealed in court documents. For example, AlaMeda Research Contracted Euclid Way Ltd. issued a loan of $ 2.3 billion company Paper Bird Inc., which is owned by Bankman-Fried. The venture company itself also learned:

• $ 1 billion – the head of the group;
• $ 543 million – the co -founder of the https://gagarin.news/news/ecology-comes-first-eu-may-ban-bitcoin-trading/ FTX NISHADA SINGHO;
• $ 55 million-Co-CEO Ryan Salame.

Corporate funds were also used to purchase real estate in Bagams to live management and advisers.

There were no corporate governance in the company’s divisions – the councils of directors were practically not held. All decisions made a narrow circle of persons led by Bankman-Fried and two co-founders, Ray pointed out.

Hacking $ 477 million

The already extremely difficult position FTX aggravated the mysterious output of more than $ 400 million from the wallet wallets to third -party addresses.

The administrator of the official Telegram channel FTX wrote that the exchange was hacked, and all assets are stolen. He later deleted the message, clarifying the abduction of “part of the funds”.

The founder of IBC Group Mario Nauphal noted that the hacker also used Kraken to remove coins. Platform Security Director Nick Percoco wrote that the team is known to the user’s identity.

We Know The Identity of the User.

– Nick Percoco (@c7five) november 12, 2022

A few days later, the FTX address associated with the alleged hacking resumed activity. The account called FTX Accounts Drainer marked Heist [robbery], made many metabolic transactions of DAI on ETH, Swaps in the BNB Chain ecosystem, as well as transferring funds to Ethereum through the cross-bridge-bridge.

Once on the Ethereum-Kitov list, FTX Accounts Drainer subsequently exchanged 50,000 ETH for wrapped bitcoin from Ren Protocol and connected assets to the cross-bridge for transfer to the main network of the first cryptocurrency.

According to Elliptic, the total damage from the actions of the hacker amounted to $ 477 million.

Experts interviewed by Cointelegraph at the time of the incident admitted that the hacking was carried out by an insider exchange.

Insulation

It is not surprising that after all these events, the FTX began to plunge into more and more isolation. Various companies and institutions took the following measures:

• Binance stopped the deposits in FTT, arguing the decision by violation of the schedule for unlocking additional utility tokens. However, soon the exchange resumed deposits;
• Kraken has blocked the accounts associated with FTX and ALAMEDA at the request of law enforcement agencies;
• Paxos at the request of the US authorities froze 11 184.38 PAXG, previously located on FTX.Com; for the release of debit cards.
• The Liquid Japanese Bitcoin-Birzha FTX froze the withdrawal of funds in cryptoactives and fiat currencies;
• Australia’s regulator has suspended the License of the local FTX branch.

SBF loomed to the prospects of criminal prosecution. In a conversation with Fortune, the lawyer who wanted to maintain anonymity referred to a federal law covering fraud using electronic means. The maximum sentence is up to 20 years in prison.

A specialist with many years of experience in the crypto industry added that law enforcement officers will be able to use the conditions for maintenance of the platform, presentations for investors and public statements by Bankman-Frida as evidence. The fact that the business practices of the exchange and the behavior of its head demonstrated fraud, the lawyer has no doubt.

The consequences for the crypto industry

The hole in the balance sheet

According to Bloomberg, during the Bankman-Fried television conference, he said that due to the liquidity crisis, the company was faced with a shortage of up to $ 8 billion. FTX needs $ 4 billion to maintain solvency, the founder of the exchange said.

The Wall Street Journal brought similar grades. Sources of the publication confirmed that the platform needs cash injections to satisfy customer requests to withdraw funds.

According to Reuters, trying to help Alameda Research, Bankman-Fried transferred at least $ 4 billion in favor of the company. This amount consisted of FTT tokens, Robinhood clients and shares.

Bloomberg journalists also learned about FTX attempts to attract emergency financing in the form of a debt, joint -stock capital or their combinations.

According to Reuters, Bankman-Fried discussed the raising funds with the founder of Tron Foundation Justin San, as well as with the leadership of Sequoia Capital, OKX and Tether Limited. The agency reported that the hole in the balance sheet is $ 9.4 billion.

CEO Ripple Brad Garlinghaus said that SBF called him when he tried to attract funding to save business. They discussed whether the exchange has units that the company “would like to purchase”.

Damage to companies

Many market participants in one degree or another interacted with FTX and ALAMEDA. Companies began to report losses one after another. Some completely or partially suspended operations completely or partially.

• The venture company Sequoia Capital recognized the loss of $ 213.5 million in investments in FTX;
• Sino Global Capital in a letter to investors said that the cost of its assets on storage in FTX is “calculated by seven -digit numbers”;
• Circle Stableco -co -eumitator reported that it owns part of the FTX Group shareholder capital in the amount of about $ 10.6 million;
• Paradigm did not reveal the exact amount, but emphasized that she deeply regrets investments in a problem company;
• Singapore Temasek Holdings wrote off investments in FTX and the American platform unit. The holding estimated the total losses of $ 275 million;
• Pantera Capital also suffered, although its representatives called losses insignificant;
• NFT marketplace MetaPlex based on Solana fired part of the team against the backdrop of the deterioration of market conditions;
• The Vauld landing platform passing through the restructuring procedure kept $ 10 million in FTX accounts;
• The Canadian Pension Fund Ontario Teachers ’Pension Plan will write off the investment of $ 95 million in FTX and its American unit;
• Jump Trading Group denied rumors about the closure due to the collapse of the SBF exchange, but the community was skeptical of the company’s message;
• Blockfi suspended the withdrawal of funds against the background of FTX crisis. According to WSJ, the landing platform is preparing a bankruptcy statement;
• Cryptocurrency Platform Genesis Trading froze the withdrawal of funds and the issuance of new loans.

According to experts Crypto Fund Research, the crisis affected 25-40% of industry investment structures that invested in FTX or its utility token. We are talking about 7-12% of assets under the management of funds.

From the materials of the court it follows that the FTX and the organizations associated with it have outstanding obligations to the 50 largest creditors for $ 3.1 billion.

SBF’s business empire collapsed on the SOLANA ecosystem, since the Alameda Research accounts stored SOL cryptocurrency with a total value of $ 1.2 billion (as of June 30).

The price of the asset sagged by more than 60%. Her quotes lost more than any other coin from the top 20 on capitalization.

Referring to “recent events in the industry”, Crypto platform.COM has suspended deposits and withdrawal of funds in USDC and USDT stablecoins on Solana.

There was also a massive Sol output from stakeing.

Proof-OF-RESERVES

A new trend was born on the market-Proof-OF-RESERVES . The Binance Exchange launched him.

“All cryptocurrencies must confirm their reserves [with the help of] wood of Mercla. […] Binance will soon begin to confirm reserves. Complete transparency, ”Zhao wrote.

The initiative was supported by CEO Kucoin Johnny Liu. According to him, the company will release the relevant document “about a month”.

A similar decision was made in OKX, Gate.Io and Huobi.

Literally the next day after the statement of Zhao, a page with a list of cryptocurrency reserves of the exchange appeared on the Binance website.

Crypto.COM also published relevant information. It turned out that the ShIB meme-token accounts for 20% of the platform reserves.

The estimated cost of crypto acts on Huobi wallets amounted to $ 3.5 billion. In Bitfinex, this figure exceeded $ 5 billion, in Bybit amounted to about $ 1.9 billion.

Ethereum founder Vitalik Buterin proposed using ZK-Snarks to verify data on cryptocurrency exchanges reserves. In his opinion, the technology will increase the effectiveness of the Proof-OF-RESERVE procedure.

Buterin expressed the hope that someday there would be a system that would not allow the exchange to operate with customer means without their consent.

In addition to confirming reserves, among the exchanges there was a tendency to create funds for the restoration of the industry to help projects facing liquidity crisis. The trend led the same Binance, and soon OKX announced the creation of a similar structure with assets for $ 100 million.

Chanpen Zhao also compiled a list of the most important, in his opinion, requirements for centralized exchanges.

Revelations SBF

In an interview with New York Times, Sam Bankman-Fried expressed regrets about the Bitcoin-Birzhi collapse and emphasized that events could develop in a more dramatic way.

According to him, the margin position “was much larger than he believed”. SBF admitted that he expanded his business interests too quickly and missed signs of problems.

Bankman-Fried also called the “strategically wrong step” criticism against Chanpan Zhao in his conversations with regulators.

In one of the recent tweets, SBF wrote that the net value of FTX and Alameda Research assets is estimated at $ 1 billion – $ 8 billion is $ 8 billion. Ex-EO also said that he would try to “increase liquidity, return assets to customers and restart” business.

However, the new head of the FTX and the restructuring director John Ray emphasized that Bankman-Fried has no constant role and does not act on behalf of Bitcoin-Tirzhi and companies affiliated with it.

On November 16, it became known that a group of American investors filed a lawsuit against SBF.

Opinions

Many experts agreed that the incident would extend the bear phase of the market and the “bottom” would not be achieved soon. For example, the author of the Telegram channel of Cryptoessay, the degree of Gershuni is convinced that the cryptosim “will wash all the people who were in the crypt for incorrect reasons”.

Bloomberg was unlikely to return the FTX customers of their funds, since the reserves of liquid assets of FTX are only $ 900 million for obligations of ~ $ 9 billion.

Chanpen Zhao warned of the upcoming “cascading effects”. In his opinion, the current situation in the crypto industry echoes the financial crisis of 2008, and in the coming weeks even more companies may crash.

Coinbase predicted the cryptosym until the end of 2023, since the FTX collapse undermined the trust of investors, caused the massive Delaveridge and the departure of large buyers.

Experts Multicoin Capital are also convinced that the consequences of the “infection” of the cryptorrhist will appear in the future. Many players will cease to exist, which will put pressure on liquidity.

However, the leadership of the venture company expressed confidence in the long -term prospects of cryptocurrencies.

“As Levreiga’s reduced, we expect to see green shoots next year,” we predicted in the Multicoin Capital.

Most of the BDC Consulting experts are confident in the further decrease in bitcoin quotations. On average, respondents expect that the price of the first cryptocurrency will stop a fall at $ 11,479.

More than half of the top managers are going to increase investments in cryptocurrencies and do not plan to reduce them.

“The development of the story with FTX can lead to a further decline in bitcoin to strong supports in the range from $ 11,000 to $ 13,500,” the managing partner of the Finth-based BitFrost Anton Chashchin shared his opinion.

In the context of the prospects of the criminal liability of SBF, the GMT Legal managing partner Andrei Tugarin noted the following:

“The subject of the SEC investigation is the misuse of customer funds. It is assumed that Sam Bankman-Frida withdrew money from FTX to Alameda Research to finance risky bets of the latter. Such actions with customer funds directly contradict the conditions of service and violate the law “.

According to Tugarin, the most probable accusation that SBF can be charged is fraud using electronic means. The maximum punishment in accordance with §1343 of the US Criminal Code is 20 years in prison.

Referring to the third point of the Haui test, the expert also did not exclude the recognition of the ftx-token-token securities:

“If the court decides that the expectations of investors have been based on the FTX statements and actions, in general, nothing will prevent the tokens to recognize the tokens and bring the exchange to justice for their placement without the resolution of the Sec”.

As for the reimbursement of funds to investors, then, according to Tugarin, this process will be delayed for a long time.

“Even on a partial return, the return of funds in the near future should not be counted. The largest exchange MT.Gox went bankrupt back in 2014 and only this summer began preparations for payments to creditors, ”the expert shared his opinion.

A lawyer under the nickname of Wassielawyer expressed the opinion that SBF should be in prison.

“Before Kwon was reckless. Voyager had poor risk management. Celsius was characterized by poor management. 3ac was incredibly irresponsible with investors.

Not that we should forgive any of the above. But this is … this is a pure crime, ”said Wassielawyer.

conclusions

The collapse of the SBF business empire is one of the largest shocks in the history of the crypto industry, which overshadows in the scale and potential consequences of the Terra collapse and hacking mt. Gox. Probably the market will soon recover from what happened.

Oppessibility, irresponsible use of customer funds, reckless personnel policy and extravagant approaches to risk management played an angry joke with once prosperous companies and their founder.

Excessive leverage can give fruit mainly only at first. The volatile nature of the market can instill multi -billion dollar digital reserves, creating a “death spi”.

Regulators are already showing increased attention to the industry. This means you can expect further “twisting of nuts”.

It is not known how everything will turn out in the field of venture investments. In the coming months, the funds, if they are poured, then only in the highest quality, promising products and after the hard procedures Dew Diliden.

But in spite of everything, the market continues to work – there are no signs of widespread loss of confidence in its prospects, especially among Hodler. Tuzemun will certainly come, but you have to wait longer.

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