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The Crypto Casino Fails, FTX Files for Bankruptcy $8 Billion in the Hole

If you had money in FTX and failed to get it out before the company halted withdrawals, then consider it gone.
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Image of Sam Bankman-Fried and Bill Clinton courtesy of CoinDesk.

Image of Sam Bankman-Fried and Bill Clinton courtesy of CoinDesk.

CoinDesk reports Washington, D.C.’s Buddy Sam Bankman-Fried Has Some Explaining to Do.

FTX was a big donor to Democrats in the mid-term elections. 

FTX hit an all-time high of $85 on Sept. 9, 2021 but may soon be worthless. It is the biggest plunge ever in market cap.

FTX Files for Bankruptcy

It's all over for FTX. It filed for bankruptcy today and Sam Bankman-Fried, widely known as "SBF", stepped down as CEO. 

The company has a shortfall of $8 billion because it lent customer money to fund trading bets to its affiliated trading firm, Alameda Research.

Unless agreements explicitly allow lending of customer deposits that's illegal. 

SBF Apologizes 

In a 22-Chain Tweet Thread SBF Apologizes. 

Here are a couple of pieces.

Point 4 appears to be a lie. FTX is bankrupt with liabilities reported to be $8 billion. 

This is not a liquidity issues. FTX lent customer money to Alameda Research and that money went to money heaven.

Hoot of the Day

"Every penny of that--and of the existing collateral--will go straight to users, unless or until we've done right by them."

It's impossible to make this right. The money vanished in a black hole. 

If you have money in FTX US you are nuts if you do not get that money out immediately. And when everyone does, let's see what is left.

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Sparring Partner? WTF?

"Well played; You won."

WTF?!

These exchanges are not (at least they should not be sparring partners). If FTX did not lend out customer's money then it would not be in this mess.

Nothing was well played here, by anyone. 

The sparring partner did not win a damn thing. The entire crypto space took a hit. 

"Sorry" does not work. If SBF illegally lent customer money, he belongs in jail.

Well played my ass. Nothing was well-played by anyone. Bring on the criminal indictments. 

Meanwhile, the crypto space which rebounded a bit in yesterday's stock and bond market melt-up is tumbling again today.

Bitcoin is under $17,000 again, down about 4 percent, and Ethereum is down about 5 percent to $1,250.

The US bond market is closed for Veteran's Day. 

For discussion of yesterday's melt-up please see Stocks Market Biggest Gains in More Than Two Years, Bond Yields Crash

This post originated at MishTalk.Com.

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