On November 11, 2022, the crypto giant FTX has placed itself under the protection of Section 11 of the U.S. law and initiated the process of personal bankruptcy, return on this earthquake in the crypto universe :

The manager and CEO Sam Bankman-Fried (= SBF) implicated

FTX is a platform that allows to exchange cryptos, it was created in 2019 and its founder established it in the Bahamas. Quickly, the platform established itself as one of the most influential behind the company Binance. Difficulties arose when a press article revealed that one of the companies created by SBF, Alameda Research, was in great difficulty and had been bailed out by FTX. Indeed, it seems that FTX had issued FTTs (= FTX tokens) in order to inject cash into this investment fund in order to give the impression of a certain financial health to the company. It was then revealed that part of the funds used to save the company would come from customer deposits.

The massive withdrawal of FTX customers

Subsequently, Binance, FTX's main competitor, announced that they were selling the FTTs they had in their assets. While FTX was asking for new funds in order to stay afloat, investors got spooked and wanted to withdraw their cryptos as quickly as possible, only increasing the company's need for cash. Binance then announced that they wanted to buy FTX, but FTX quickly pulled out. Finally, the company was also reportedly the victim of a hack, as an unauthorized transfer of funds amounting to more than 400 million euros was reportedly made.

The regulation of cryptos, an issue on the forefront

As Binance founder Changpeng Zhao has repeatedly said, the collapse of this competitor is not good for him or for the crypto market. The crypto and blockchain world relies on its security and autonomy. However, platforms have suffered several hacks in recent months and the bankruptcy of FTX calls into question the autonomy of crypto players. So far, few countries have regulated the activity and, in fact, do not really know how to regulate it. France has started to regulate crypto with the PSAN approval that it is necessary to obtain in order to distribute its product on the territory. Also, the European Union's MiCA regulation could standardize the regulation of crypto assets throughout Europe. Many players are also starting to ask for more transparency. The real problem is that a risk of capital loss due to the market is an acceptable risk for users. On the other hand, a loss of capital is less acceptable when it is caused by mismanagement of the company or a possible conflict of interest. The latest events have scared investors and withdrawals have been made on a large scale, this can demonstrate that crypto companies, like any financial service provider, might need supervision.

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