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The FTX exchange platform was the latest cryptocurrency company to blow up. And now, all the pieces that have been left broken have been used to put together one by one and tie up ends. The founder and CEO of the exchange, Sam Bankman-Fried, used the company's money to rescue another of his companies, Alameda Research. Problems at the latter surfaced amid the bankruptcies of Terra, Three Arrows Capital (3AC) and Vauld, although they did not come to light then because of the bailout that is now sinking the then rescuer.
FTX lent billions of dollars to Alameda, granting it loans with high risk. Some $10 billion came from the pockets of the platform's users out of a total of $16 billion deposited by them, according to The Wall Street Journal. In other words, the former had lent the latter 62% of its customers' funds.
This possibility, which Bankman-Fried has not acknowledged, makes more sense looking back. In August, the two firms merged their private...