FTX Exchange: The Complicated Story of its Acquired Shares
FTX is a popular application used for trading cryptocurrencies, stocks, and other products. However, the fate of its acquired shares is just as complex as the history of the exchange itself and its founder. The shares were taken over by the Department of Justice in January of this year, as they were considered part of FTX’s estate. The original owner of the shares was Emergent Fidelity Technologies, a holding company, in which the majority shareholder was none other than Bankman-Fried. The company went bankrupt shortly after FTX’s collapse.
The fate of Robinhood is also complicated. Four entities wanted to seize ownership of the company’s shares. The first was FTX, the second was Bankman Fried, the third was BlockFi, a company that provides cryptocurrency loans. The shares were meant to secure a loan given to Emergent. Individual creditors of FTX also claimed the shares.
Bankman-Fried had previously attempted to recover the lost shares of his exchange. He even argued that being denied access to them hindered his defense in the ongoing trial for allegedly organizing a multi-billion dollar fraud and misappropriating client funds.
The collapse of FTX shook the bitcoin market. In November 2022, it was revealed that the company, which had gained the trust of many retail investors, was facing serious difficulties. First, there were reports of attempts to attract investors who could contribute up to $20 billion. However, these reports did not lead to investors withdrawing their funds from FTX. The real panic began when Changpeng Zhao, the CEO of Binance, one of the world’s largest cryptocurrency exchanges, announced the sale of his FTX assets. Other investors followed suit, and within a few days, the exchange saw an outflow of $6 billion. Those who were more aware managed to save their money, but for others, it was too late.
The FTX catastrophe frightened customers of other exchanges, and Bitcoin’s price dropped from $21,000 to $15,600 in a matter of days. There were concerns that investors would become less favorable towards virtual currencies. However, these fears did not fully materialize, as evidenced by the current price of Bitcoin, which stands near $26,000. Although it was higher in mid-July (around $31,000), there is no longer any trace of the slump that occurred after FTX’s bankruptcy, just like the pessimism of investors.