Behind the collapse of FTX and SBF: traditional finances versus cryptocurrencies

When the SBF (Samuel Bankman-Fried) announced that FTX and its 130 member companies had filed for bankruptcy protection, the last shred of faith in the former billionaire was lost. Meanwhile, people inside and outside the crypto community began to criticize the industry for its lack of transparency.

Said that, Can SBF and FTX & Alameda Research Really Represent the Entire Cryptocurrency Industry? Is the FTX Crash the Crypto Industry’s Fault?

There is nothing new on Wall Street

Jesse Livermore was once considered the greatest trader of all time. In his biography titled “Memoirs of a Stock Exchange Operator”, an investment bestseller, he tells us how he felt about Wall Street when he got there:

“Another lesson I learned early on is that there is nothing new on Wall Street. You can’t, because speculation is as old as the hills. What is happening in the stock market today has happened before and will happen again.”

History has proven time and time again that this claim is correct. Interestingly, when Livermore, one of the richest merchants in the world at the time, committed suicide, he had debts that exceeded his assets.

What happened to FTX is nothing new on Wall Street. Lehman Brothers, for example, with a debt of $613 billion, sought bailouts from many institutional investors, but Wall Street executives rejected their request after examining the accounts of the legendary investment bank. In the end, Lehman Brothers had no choice but to file for bankruptcy protection.

The fall of Lehman Brothers sounds familiar. Founded by the “merchant genius” SBF, FTX and Alameda are at least billions of dollars in debt.

After hearing reports highlighting Alameda’s balance sheet issues, the SBF tweeted that the company was healthy but had begun seeking bailouts from institutional investors and even competitors in particular. Despite such efforts, investors eventually had to file for FTX bankruptcy protection.

SBF: Guardian or Traitor?

After Luna’s collapse, many reports suggested that FTX provided relief to many institutions affected by the incident, although many acquisitions did not actually take place. While the media portrayed the SBF as a savior, the man lobbied US regulators in an effort possible industry standards for digital assets🇧🇷

After it was released, the draft document was opposed by many professionals in the crypto industry, as it considers freezing funds on the network to be a normal practice. Further, it suggests that DeFi platforms should register as an exchange, and also advocates KYC in DeFi.

FTX is an iconic CEX, making people question the motivations behind their attack on DeFi. It is also because of this that many call the SBF a hypocrite and believe it wants to destroy the cryptocurrency industry.

After FTX was declared bankrupt, US Congressman Tom Emmer tweeted: “Gary Gensler is running to the media because reports in my office claim he helped the SBF and FTX work through legal loopholes to gain a regulatory monopoly. We are investigating this”🇧🇷

The tweet reveals why the SBF often looks for regulators.

It is clear that the austerity picture constructed by the media is not true. In fact, the SBF has never claimed its allegiance to cryptocurrencies. When he joined the industry, he didn’t really understand what crypto is, and what motivated him to venture into the industry was that he believed that the BTC price differential between the US and Japan would allow him to gain arbitrage profits.

In an interview with Forbes, when asked if he would leave the industry if he found a better way to make money, he said trading orange juice future, he did not hesitate. “Yes, I would.”

The ultimate solution for cryptocurrencies

Judging by the FTX meltdown, the crypto sector is not the best choice for the SBF. Under his leadership, FTX was the judge in a game where Alameda (as a market maker) was a player.

Evidently, the former Wall Street genius viewed cryptocurrencies as a way to accumulate wealth through speculation, ignoring the principles of decentralization and transparency🇧🇷 Cryptocurrencies stand for equality for all, which is the exact opposite of Wall Street principles.

As a longtime believer in crypto assets and blockchain technology, CoinEx has always prioritized technology and product while seeking transparency, ease of use and reliability. It is also one of the first cryptocurrency exchanges to promise to process all withdrawals immediately and never misuse users’ assets.

In addition, always with the aim of offering ease of use, The CoinEx works to remove the limitations of the conventional financial systemwith user-friendly products and services that transcend all language barriers and geographic restrictions.

The broker aims to provide services to more retail users who intend to trade cryptocurrencies around the world, facilitating crypto asset trading.

As one of the leading CEXs, CoinEx intends to drive the advancement of cryptocurrencies, rather than limiting itself to its own interests🇧🇷 Mining pools, DEXs, wallets and the public network are indispensable parts of the crypto ecosystem.

The ViaBTC Group, parent company of CoinExoffers a wide range of services in various areas, including:

  • mining pool
  • decentralized wallet
  • public network
  • capital investments

In addition, it provides technical and financial support for many DeFi and NFT projects, including DEXs, to meet the various demands of users, protect their assets, and facilitate the joint progress of all participants in the crypto industry.

The fall of FTX does not represent the failure of cryptocurrencies. Sure, it’s an iconic crypto firm built by traditional finance professionals, but this isn’t the first time the Wall Street elite has failed, and it won’t be the last.

Clearly, if the Wall Street elites still want to “conquer” the crypto sector, the traditional banking model of fractional reserves and misuse of user assets is no longer working.

The FTX incident showed that the crypto community still has a long way to go🇧🇷 Despite that, the CoinEx is convinced that blockchain and crypto technologies will revolutionize the financial world.

The FTX crash reminded us that the crypto industry is supposed to be a party for Wall Street’s elites, and that crypto companies can only achieve true success by focusing on the demand of the general public.

CoinEx and many others believe that the best solution is to remove financial barriers and close the information gap between retail investors and institutional investors.and allow everyone to enjoy accessible and transparent services.

Source: Live Coins