Is FTX Saga The Biggest Crypto Saga In 2022 - Why Did It Go Wrong?

Given all that has occurred this year, this year will undoubtedly rank among the worst cryptocurrency years in the history of the industry. However, FTX made the decision to end it with a breathtaking closing. I know you might argue that the year hasn't ended yet, but come on, take a look. What do you think? The only heartbreak that could be worse than this—again, the only heartbreak that is possible—would be a crash of Coinbase or Binance. As a refresher, FTX is the second-largest cryptocurrency exchange by volume, and its native token, FTT, was ranked among the top 50 cryptocurrencies globally. In less than three days, we observed it lose 90% of its value.

Let's look back on previous bad crypto experiences from 2022. The first one was the LUNA crash, which cost many people their savings. As a result of that bad experience, they resolved to be more cautious going forward. Sam Bankman Fried was frequently featured in the news because he was held up as the crypto messiah after Celsius and 3AC fell because to their excessive leverage with investors' money. He was always very quick to act when any cryptocurrency company was in trouble and offer his assistance, whether it was through an acquisition or a partnership. This resulted in many companies falling under FTX. Since FTX purchased them, we have large exchanges like Liquid, Blockfolio, and BlockFi under our control, preventing them from ceasing to function. As a result, consumers continued to utilize these platforms and to keep their assets there since they thought everything was great as they were covered by FTX.

What do you do when your savior needs saving? Today, 130+ FTX companies declared bankruptcy, obviously because these companies relied on Sam Bankman-Fried. You must naturally increase your savings as a result, right? To return to the reason why the FTX saga may be the worst crypto-related event of the year.

Many people had faith in FTX and trusted him with their money because he was constantly making headlines for his deeds and accomplishments, to the point where he was frequently contrasted with CZ, the CEO of Binance, in terms of how he is his rival. This individual, after all, was continually raising money, and many people were investing in his business and his token. Due to their high-profile sponsorships and usage of A-list celebrities as brand ambassadors, which increased the number of people participating in their exchange, no one anticipated that his company would fail. Those that purchased and staked FTT eventually learned that FTX had utilized the token as collateral, which caused a significant decline in value.

How can an investor who had investments in any of the exchanges that FTX purchased get their money back? How are individuals feeling, even those who trusted the CEO enough to leave their assets and NFTs in FTX? Today, we learned that individuals were paying the FTX to process their withdrawals on their behalf. As a result, both investors who purchased the FTT token and those who invested in the FTX company lost their money. Fintech companies that invested in FTX lost money as well; many of these firms are poised to come clean and admit their investments in FTX and will likely file for bankruptcy, just like firms that made investments in Luna and UST.