FTX founder SAM BANKMAN FRIED got arrested in Bahamas and is expected to extradited to UNTIED STATES . SAM BANKMAN FRIED has admitted to fraud and using their customer’s money illegally . FTX founder secretly transferred upto 10 billions of dollars which lead to crash in crypto market upto 150 billion dollars in market valuation. Just a few months prior to the inevitable downfall of FTX, FTX looked liked a stable brokerage firm but behind the scenes it was drowning in debt . Close to 2 billions of dollars of customer’s money have vanished. So how all this saga went down
Alameda Research which was also co-founded by SBF . SBF moved around 10 billion dollars to Alameda research which is also a crypto brokerage firm. Alameda research suffered huge losses due to absolute reckless trading . Alameda research put up FTX tokens as collateral for the loans but it was very problematic simply because FTX tokens were not heavily traded beyond the ecosystem of FTX Environment and were hugely dependent on success or failure of FTX itself
SO HOW DID SBF PULLED OFF THIS HUGE FRAUD
As we know close to 2 billions dollars have vanished . ALLEGEDLY SBF DEVELOPED A CUSTOM-MADE ACCOUNTING SYSTEM TO HIDE ALL OF THE MISSING MONEY . HOWEVER MANY SKEPTICS OF FTX were ringing the alarm bell well before the collapse of FTX.
MARC COHODES WHO IS A VETERAN SHORT SELLER STRAIGHT OUT CALLED FTX AS A SCAM ON 11TH OF OCTOBER AMONG MANY OTHER SKEPTICS . FTX WAS NOT TREATING CLIENT’S ASSETS SEPARATELY FROM MARGIN TRADING. TREATING CLIENT’S ASSETS SEPARATELY FOR LEVERAGING FOR MARGIN TRADING KEEPS CLIENT’S MONEY SAFE IN CASE OF A CRASH. THATS HOW LEGITIMATE EQUITY BROKERAGE FIRM OR OTHER CRYTO BROKERAGE FIRM WORKS IT ALL COULD HAVE BEEN AVOIDED IF CRYPTO MARKET WAS REGULATED LIKE OTHER FINANCE RELATED INDUSTRIES