Cryptocurrency exchange FTX was seen as a survivor in a struggling industry, but over the course of six days the exchange collapsed due to a sudden liquidity crunch. WSJ explains the factors that drove FTX’s growth and what led to its downfall. Illustration: Alexandra Larkin What Went Wrong explores the challenging conditions and decisions that led to a company’s downturn.
FTX is a cryptocurrency exchange operating in the Bahamas. Sam Bankman-Fried, also known as SBF in the crypto industry, was launched in 2019. The exchange expanded throough venture capital funds which also provided millions of dollars in funding. FTX is a centralized cryptocurrency exchange centered on derivatives and leveraged products. It offers support for cryptocurrencies, including Bitcoin, Ethereum, Tether, and others that see a lot of trading activity.
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Sudden collapes of exchanges hugely affect the position of portfiolio hedging across exchanges under co-operate account.