Mark Cuban expresses his displeasure.After three tumultuous days during which a firm with a February market value of $32 billion urgently requested assistance from its rivals, the Bitcoin exchange filed for Chapter 11 bankruptcy on Nov.11.The fall of FTX, one of the major participants in the cryptocurrency arena, in less than a week seems to have surprised the successful entrepreneur, as it does the majority of business circles.However, the financial state of FTX was too bad for a prospective saviour to attempt to save it.The largest cryptocurrency exchange, Binance, which is a major rival of FTX, tried but ultimately gave up.
“At first, we hoped to be able to assist FTX’s clients in providing liquidity, however the problems are beyond our control or capacity to assist.” Binance announced on November 9 that it would not pursue the potential acquisition of http://FTX.com.“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S.
agency investigations, we have decided that we will not pursue the potential acquisition of http://FTX.com,” Binance said.As a cryptocurrency exchange, FTX carried out orders on behalf of its customers, accepting their money and purchasing virtual currencies.As a custodian, FTX kept the clients’ digital currency.Then, through the trading division of its sister firm, Alameda Research, FTX exploited the cryptocurrency holdings of its clients to earn money by borrowing or market making.
In the summer of 2022, FTX bailed out other crypto institutions with the money it had borrowed.FTX used the crypto currency it was issuing, FTT, as collateral on its balance sheet at the same time.Due to the concentration risk and the volatility of FTT, this exposure was quite large.Clients scrambled to liquidate their crypto assets and get their money back as soon as this exposure was made public out of fear that FTX might crash.
Customers withdrew a record $5 billion on Nov.6.On the exchange, there was a run.As a result, FTX was unable to fulfil the sell orders of its clients since it lacked the crypto assets that were now being lent out or sold.Prices of cryptocurrencies fell as a result of the panic.Investors are selling shares of cryptocurrency firms like Coinbase (COIN) – Get Free Report, MicroStrategy (MSTR), and Robinhood (HOOD) – Get Free Report out of concern for a contagion effect.Which businesses will be impacted is the current question.In an effort to understand how a company of this size can implode without the regulators realising the risk, the search for blame has also begun.
This is especially true given that the company’s former CEO, Sam Bankman-Fried, was whispering in the ears of the regulators and politicians to determine what regulations would be appropriate for the industry.The SEC was missing.Mark Cuban, who has invested in a number of businesses and initiatives connected to cryptocurrencies, thinks that authorities have failed in their duty.He specifically has the Securities and Exchange Commission (SEC) of the United States in mind.
Contrary to popular belief, the bitcoin sector is controlled for the billionaire.It so happens that the SEC didn’t perform up to par.He just stated this on Twitter.On November 12, the Shark Tank star tweeted, “Everyone is saying that cryptocurrency is unregulated.” “It’s untrue.The SEC claims to control cryptocurrency.Inquire of Kim Kardashian and the parties they have settled or sued.” Why hasn’t the SEC already knocked on the doors of the central exchanges, he continued, given their visibility? A centralised exchange existed in FTX.The Dallas Mavericks’ owner mentions the SEC’s penalties and sanctions against cryptocurrency and other ventures.
For him, it is obvious that the federal agency oversees the industry if it deems it appropriate to punish Kim Kardashian for endorsing phoney coins.
Therefore, they bear some of the blame for the FTX fiasco.News Summary: – – Check all news and articles from the latest Business news updates..