What happened to FTX?

The issues at FTX have complex roots, but reached a head early Tuesday, Nov. 8, whena huge wave of withdrawals drained FTX of liquidity and effectively froze the platform – almost always a sign of serious issues for a centralized exchange.

Why did Binance pull out of ftx?

Binance announced on Nov. 6 that it would sell its FTT tokens “due to recent revelations.” In response, FTT’s price plummeted and traders rushed to pull out of FTX, fearful that it would be yet another fallen crypto company. FTX scrambled to process requests for withdrawals, which amounted to an estimated $6 billion over three days.

Why did FTX file for bankruptcy?

FTX filed for bankruptcy at the end of last week, after Binance reversed course on a deal to save the company. The bankruptcy filing on Thursday by Mr. Ray, the new FTX chief, described numerous corporate missteps, including the use of software to “conceal the misuse of customer funds.”

Is FTX facing Celsius-style insolvency?

The nightmare scenario would be that FTX has been using customer funds for trading or other speculative activities – possibly including loans to sister company Alameda Research – and lost funds in the process. For now, it’sunclear whether FTX is facing Celsius-style insolvency – an uncoverable debt at the level of its entire balance sheet.