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FTX Crisis Spurs and Sam Bankman-Fried Is Under Fire

Lu Tian· 3 min read

FTX is bust, and crypto is plummeting as contagion spreads.

After the announcement, he tweeted, “Sad day. Tried, but 😭”.

“The ongoing liquidity crunch, despite short term in nature, is harmful to the industry development and investors alike.”  Justin Sun, the founder of Tron, shared the same opinion, and said he is 'putting together solution' for FTX later today, but without sharing any details.

According to a report from Huobi Research, the impact of the FTX crisis may exceed the Luna and 3AC collapse. In July 2020, 3AC, the most prominent crypto hedge fund which managed about $10 billion in assets, headed to bankruptcy court and leave it unable to repay lenders.

On Wednesday, Galaxy Digital CEO Michael Novogratz said he is “angry” and “frustrated” about the latest situation around FTX, reported Blockworks. Galaxy Digital, the crypto-focused financial-services firm, said it has exposure of around $76.8 million of cash and digital assets tied to troubled crypto exchange FTX. “In some ways, this is the year where the bad news in crypto has just kept coming,” Novogratz said the crypto industry has done a bad job of self-regulating. “What’s painful about this is that Sam spent so much time in DC. It wasn’t that what he was saying was crazy. It’s just that if the messenger now looks like he ran his ship into an iceberg…it’s just going to anger the people he spent time with and slow this down some,” he added.   

Michael Novogratz, CEO of Galaxy Digital

This is a historical moment. . . a bit of a ‘what the fuck’ moment,” Pascal Gauthier, CEO of crypto wallet firm Ledger, told Financial Times. “It shows that no one is too big to fail. FTX seemed untouchable,” he added. Before this week, FTX was the fourth-biggest exchange, processing billions of dollars in daily trading volumes.

Pascal Gauthier, CEO of Ledger

FTT, the token native to the crypto exchange FTX, traded at around $22 on Monday and sank below $5 Tuesday afternoon in New York. The sell-off wiped out more than $2 billion in value in the space of 24 hours. A senior executive at a Crypto trading firm said: “It’s almost like a company using their equity as collateral on a loan. And you would never do that because it is linked to your health as a business. It becomes worthless when you need the collateral to do its job.” (from Financial Times )

On social media, Sam Bankman-Fried is under fire.

Mike Winkelmann, aka the digital artist Beeple, who is famous for selling his NFT work “Everydays: The First 5000 Days” for $69 millon, tweeted “damn you @SBF_FTX”.

It’s criminal.” Crypto Influencer Ben Armstrong commented on FTX incident on Twitter and said, “I had zero sympathy for SBF & am going to enjoy sending him to prison”.  As for FTX investors, he feels sorry for them as chances are that they would never get their money back.

Memes about Biance Changpeng Zhao and Sam Bankman-Fried are getting viral on Twitter.

This meme frames Changpeng Zhao as the “professor,” warning that if we mess around with Binance, we will face the same consequences as FTX.

This meme, made from a screenshot of a Bloomberg headline, suggests that Sam Bankman-Fried has succeeded in giving his “fortune” away because he is handing FTX over to Binance.

# Crypto

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