Vinay Krishna

Finance-FinTech

FTX Collapse was a Fraud not an accident: CoinDesk

The collapse has been widely presented as a "Bank Run" kind of situation leading to bankruptcy, but nothing can be further from the truth: 1. FTX and other crypto exchanges are not banks. They do not (or should not) do bank-style lending, so even a very acute surge of withdrawals should not create a liquidity strain. FTX had specifically promised customers it would never lend out or otherwise use the crypto they entrusted to the exchange. 2. The exchange and the Hedge Fund (Alameda) had the same founders and did not maintain arms length distancing, instead cozied up!