When the SBF (Samuel Bankman-Fried) announced that FTX and the 130 affiliated companies had filed for bankruptcy protection, people lost the last bit of confidence in the former billionaire. Meanwhile, people inside and outside the crypto community began to criticize the industry for its lack of transparency. That said, can SBF and FTX & Alameda Research really represent the entire cryptocurrency industry? Is the FTX crash the fault of the crypto industry?
There’s nothing new on Wall Street
Jesse Livermore was once considered the greatest trader of all time. In his biography entitled “Memoirs of a Stock Trader”, a bestselling investment book, he tells us how he felt about Wall Street when he got there: “Another lesson I learned early on is that there is nothing new on Wall Street. Street. There cannot be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.” Time and time again, history has proven this claim to be right. Interestingly, when Livermore, one of the richest traders in the world at the time, committed suicide, he had debts greater than his assets. What happened to FTX is nothing new on Wall Street. For example, Lehman Brothers, which was $613 billion in debt, sought bailouts from many institutional investors, but Wall Street executives turned down their request after examining the legendary investment bank’s accounts. In the end, Lehman Brothers had no choice but to file for bankruptcy protection. The fall of Lehman Brothers sounds familiar. FTX and Alameda, founded by the “merchant genius” SBF, are at least billions of dollars in debt. After we heard reports revealing the problems with Alameda’s balance sheet, the SBF tweeted that the company was healthy but had begun seeking bailouts from institutional investors and even competitors in particular. Despite such efforts, investors ultimately had to face filing for FTX bankruptcy protection.
SBF: Guardian or Traitor?
After Luna’s collapse, many reports suggested that FTX offered help to many institutions hurt by the incident, although many acquisitions did not actually take place. While the media painted the SBF as a savior, the man was lobbying US regulators in an attempt to pass potential digital asset industry standards. After it was released, the draft document was opposed by many professionals in the crypto industry, as it considers freezing funds on the network as normal practice. Furthermore, it suggests that DeFi platforms should register as an exchange, and it also advocates for KYC in DeFi. FTX is an iconic CEX, which makes people doubt the motivations behind their attack on DeFi. It is also because of this that many call the SBF a hypocrite and believe that it wants to destroy the cryptocurrency industry. After FTX declared bankruptcy, US Congressman Tom Emmer tweeted: “Gary Gensler runs to the media as reports in my office allege he was helping the SBF and FTX work through legal loopholes to gain a regulatory monopoly. We are investigating this.” The tweet reveals why the SBF often seeks out regulators.
Clearly, the saving image constructed by the media is not true. In fact, the SBF has never asserted its allegiance to cryptocurrencies. Upon joining the industry, he didn’t really understand what crypto is, and what motivated him to venture into the industry is that he believed that the BTC price difference between the US and Japan could allow him to earn arbitrage profits. In an interview with Forbes, when asked if he would leave the industry if he found a better way to make money, saying trading orange juice futures, he didn’t hesitate. “Yes, I would.”
The ultimate solution for cryptocurrencies
Judging by the FTX meltdown, the crypto sector is not the best choice for the SBF. Under his leadership, FTX was the judge in a game in which Alameda (as a market maker) was a player. Apparently, the former Wall Street genius considered cryptocurrencies a way to accumulate wealth through speculation, ignoring the principles of decentralization and transparency. Cryptocurrencies stand for equality for all, which is the exact opposite of Wall Street principles. As a long-term believer in cryptocurrency and blockchain technology, CoinEx has always prioritized technology and product while pursuing transparency, ease of use and reliability. It is also one of the first cryptocurrency exchanges that promises to process all withdrawals immediately and never misuse users’ assets. Furthermore, always aiming to provide ease of use, CoinEx works to remove the constraints of the conventional financial system by providing easy-to-use products and services that transcend all language barriers and geographic restrictions. The broker aims to offer services to more retail users who plan to trade cryptocurrencies around the world, thereby facilitating crypto asset trading. As one of the leading CEXs, CoinEx aims to drive the progress of cryptocurrencies rather than being limited to its own interests. Mining pools, DEXs, wallets and the public network are indispensable parts of the crypto ecosystem. ViaBTC Group, the parent company of CoinEx, provides a wide range of services covering various fields, including: mining pool decentralized wallet public network equity investment In addition, it provides technical and financial support for many DeFi and NFT projects, including DEXs, in order to meet the different demands of users, ensure protection of their assets and facilitate the joint progress of all participants in the crypto industry. The fall of FTX does not represent the failure of cryptocurrencies. Sure, it’s an iconic crypto company built by traditional finance professionals, but this isn’t the first time Wall Street’s elite has failed, and it won’t be the last either. Obviously, if Wall Street elites still want to “conquer” the crypto sector, the traditional banking model of fractional reserves and misuse of user assets no longer works. The FTX incident showed that the crypto community still has a long way to go. Despite this, CoinEx is confident that blockchain and crypto technologies will start a revolution in finance. The FTX crash reminded us that the crypto industry is supposed to be a party for Wall Street elites, and crypto companies can only achieve real success by focusing on general public demand. CoinEx and many others believe that the best solution is to eliminate financial barriers, close the information gap between retail investors and institutional investors, and allow everyone to enjoy accessible and transparent services.