The Downfall Of FTX: Brief And Comment

In the wake of the collapse of FTX, which was ranked as the world's third-largest cryptocurrency exchange just days before declaring bankruptcy¹, this is a concise attempt to comprehend what caused the downfall of the cryptocurrency giant in layman's terms and appreciate the lack of regulatory oversight, auditing and corporate governance failures exposed from this saga.

To begin with, in order to understand the collapse of FTX and its impending overwhelming impact on the crypto market, oversimplified information about its complex corporate structure needs to be provided which according to the bankruptcy filing contains more than 120 companies in various jurisdictions². Mr. Sam Bankman-Fried (SBF) is the founder of Alameda Research, the cryptocurrency hedge fund and FTX Trading, the cryptocurrency exchange. In early October 2022, FTX was valued at around $32 billion³. It is equally important to note, that FTX was also the issuer of a cryptocurrency token named