Benny-Morrison, Ava; Murphy, Margi (1 February 2024). “FTX’s Missing $400 Million Were Stolen in SIM-Swapping Hack, DOJ Says”. Gara, Antoine; Shubber, Kadhim; Oliver, Joshua (12 November 2022). “FTX held less than $1bn in liquid assets against $9bn in liabilities”. Sigalos, MacKenzie (12 November 2022). “Between $1 billion and $2 billion of FTX customer funds have disappeared, SBF had a secret ‘back door’ to transfer billions: Report”. Ashworth, Louis; Elder, Bryce (10 November 2022). “Watching tether wither, together”.

Different Types Of Crypto Trading

Lawrence Summers acknowledged the comparisons to Lehman and further compared the collapse to the Enron scandal, caused by fraud perpetrated by Enron executives. Rostin Behnam, the Chairman of the Commodity Futures Trading Commission, called for Congress to grant the organization more power to regulate cryptocurrencies. Risk management firm Titan Grey published a primer on the commencement and early motions practice of the FTX chapter 11 case, analyzing issues such as creditor privacy, relief from the automatic stay, proposed differential treatment of customers from other creditors, and others.

Prior to its collapse, FTX was the third-largest cryptocurrency exchange by volume and had over one million users. On 2 November 2022, CoinDesk published an article stating that Alameda Research, a trading firm affiliated with FTX and owned by FTX chief executive Sam Bankman-Fried, held a significant amount of FTX’s exchange token, FTT. The article triggered a spike in withdrawals from FTX, but eventually, customers became unable to retrieve the money they had deposited in the exchange.

Jim Chanos predicted the collapse of FTX would lead to increased scrutiny and regulation of cryptocurrencies. Richard Handler, CEO of American financial firm Jefferies Group, tweeted on 10 November that he had attempted to meet with Bankman-Fried in July and again in September as he perceived he was “in over his head”. The sudden collapse of FTX has been compared to the bankruptcy of Lehman Brothers by writers in publications including The New York Times and the Financial Times, with some deeming FTX’s collapse as “crypto‘s Lehman moment”. Chanos further criticized the cryptocurrency sector as “designed to extract fees from really unsuspecting investors”. Handler stated that Bankman-Fried did not respond to the emails sent from Jefferies staff sent on Handler’s behalf.