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ARTICLE · 02 JANUARY 2023

FTX's House Of Cards

Ikigai Law
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If you doubted FTX some months back, many tweeps would accuse you of spreading FUD (fear, uncertainty, and doubt). After all, it was the third largest crypto exchange (by volume) and was valued north of $30 billion.

IndiaTechnology
Ikigai Law
Ikigai Law
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A post-mortem on the crypto-collapse being described as worse than Enron.

If you doubted FTX some months back, many tweeps would accuse you of spreading FUD (fear, uncertainty, and doubt). After all, it was the third largest crypto exchange (by volume) and was valued north of $30 billion. Its founder, now infamous SBF, was then rescuing troubled crypto firms, drawing comparisons with the banking bigwig, JP Morgan. SBF was also among the most powerful people in crypto. So, what went wrong?

A lot. There are many explanations out there. But this is the simplest version of events (based on public sources).

SBF sets up Alameda Research. It's a trading firm that makes risky trades in crypto. Now, SBF says "right, why do we need to trade on other exchanges? Let's create one for ourselves." And then FTX, the crypto exchange, is born. FTX and Alameda are distinct entities. But not really.

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