FTX Collapse: Pride and Greed Led to Digital Currency Exchange Downfall
• The recent report suggests that FTX’s collapse was due to hubris and greed by its executives.
• Sam Bankman-Fried is facing charges for misusing customer funds, including buying luxury real estate in the Bahamas.
• Furthermore, a lack of oversight and competence also contributed to the company’s downfall.
A new report has just been released detailing why the FTX digital currency exchange fell apart. According to the report, it was a combination of hubris and greed that led to its collapse.
The former head executive of FTX – Sam Bankman-Fried – is now facing charges for misusing customer funds to buy luxury real estate in the Bahamas, where the company was stationed. This is just one part of his alleged misconduct during his time at FTX.
Lack of Oversight & Competence
The debtors’ report also highlighted how an incredible lack of competency underlined many mishaps that occurred behind the FTX walls. There were no key executive roles put in place to ensure duties were completed on time or a cybersecurity department set up to protect customer funds should any issues arise. Furthermore, there was no framework or oversight of business dealings which resulted in many employees making jokes about how quickly money would be lost at times.
Rise & Fall
FTX had grown rapidly over its four years since 2019 – becoming one of the biggest crypto exchanges in the world by summer 2021 – but ultimately fell apart as quickly as it had risen due to its detrimental practices and bad behavior.
The fall of FTX is likely one of most embarrassing occurrences within the digital currency space and serves as a reminder that proper precautions must be taken when dealing with such transactions – both legally and safely – so similar events don’t occur again in the future.