Key Insights
- In a throwback to the early days of crypto, FTX, the third largest crypto exchange, halted user withdrawals during a bank run. There is reportedly a shortfall of $8 billion.
- Sam Bankman-Fried, the founder of the exchange, was the poster boy for the crypto industry’s efforts to find legitimacy. In a twist of irony, his blow up and alleged mismanagement may set the industry back again in the eyes of regulators.
- FTX and Alameda Research were prominent supporters of Solana and its ecosystem. SOL is now down 50% over the past two days as supporters try to rebuild amid the uncertainty.
Background on the Drama
What. A. Week. The world’s third largest crypto exchange just went belly up, and the industry’s white knight got dragged down in the process. Grab a (Irish) coffee, and let’s figure out what the hell happened and what the implications are.
Sam Bankman-Fried (SBF) is the CEO of FTX, one of the world’s largest exchanges and also principal shareholder of Alameda Research, a separate trading firm he founded prior. There is also an entity called FTX.US. FTX.US is operated as a distinct U.S. operation, separate from FTX with SBF again acting as a principal though not overseeing day-to-day operations. FTX has received funding from big names like BlackRock, SoftBank, Temasek, Tiger Global, and the Ontario Teachers' Pension Plan. FTX was also a large investor themselves through FTX Ventures, making over 60 individual investments. The full list of investors can be found on our Fundraising page.
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