The more it changes, the more it remains the same. This is turned out to be one of the biggest scams in American history. How and why, everybody has been taken for a ride, is the most intriguing part of it all. While we remember Enron and lots of other scams, are we not forced to believe that due diligence is sham and with little bit of street smartness and guile with the capability to sell, you can literally make a fool of the world. Now in the thick of storm different stakeholders would act differently, not to make amends, but to save themselves of any allegations, dereliction of duty etc and finally we can wait another scam to happen.
Setting right systems has not been the agenda of the world, more so high tech and finance areas. FTX Trading Ltd., commonly known as FTX (Futures Exchange) hitting bankruptcy in not time since the first revelation, would be fastest would be in the history of any company in the world. Starting with most startling, the Court appointed FTX CEO told House Committee on Dec 13, that FTX practiced “no bookkeeping.” He also went on to say, that ”it was old style embezzlement.”
FTX filed for Chapter 11 bankruptcy protection after a complete fall from grace. FTX operated a cryptocurrency exchange and a crypto hedge fund. Founded in 2019, at its peak in July 2021, it had over one million users and was the third largest crypto currency exchange by volume. Incorporated in Antigua and Barbuda, was headquartered in Bahamas, it was closely associated with FTX.US, a separate exchange available for US residents. The FTX collapse took place in a ten-day period in Nov. 2022. The main catalyst was a Nov 2, CoinDesk scoop. It revealed that Alameda Research, CEO’s Bankman-Fried’s trading firm held a position worth $5 billion in FTT, the native token of FTX. Alameda’s investment foundation was also FTT, the token its sister company had invented and not a fiat or other crypto currency.
What is looks like is a clear-cut theft and not even a ponzi scheme. The writing was now on the wall. Binance CEO announced that he will sell his entire positions in FTT tokens. The withdrawals would end up resembling a classic bank run. Billions of dollars poured out of the platform. Nov.8 FTX stopped allowing customers to take out money from the platform. A bunch of friends operating out of Bahamas have taken the world for a ride, at their whims and fancies. From wooing the politicians to displaying their altruism, to the passion to change the world were all sham. While some smelt rat, the government and regulatory agencies remained completely in the dark. What a tragic case; the balance sheet of Bankman-Fried’s firms were never audited, as per company’s bankruptcy court filings. The message we carry out of this filing is that there is no reliable account or paper trial of what the company had. And more importantly where it went?
FTX SCAM HAS MADE A MOCKERY OF REGULATED WORLD OF COMPANIES AND FINANCE.
Have a nice evening.