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FTX founder says what caused the exchange collapse, and his plan to 'restart'

The founder and former CEO of cryptocurrency exchange FTX has taken to Twitter to explain why the collapse occurred and his plan to 'restart.'

FTX founder says what caused the exchange collapse, and his plan to 'restart'
1 minute & 56 seconds read time

The downfall of FTX is still in mid-flight, with the former CEO and co-founder of the cryptocurrency exchange discussing his version of the events on his Twitter account.

The face of FTX, Sam Bankman-Fried (SBF), has been caught in a whirlwind of his own creation by being accused of mishandling customer assets through FTX's sister company called Alameda Research, who was purportedly using FTX customer money to make poorly placed trades. Additionally, reports have surfaced that Alameda Research routinely engaged in frontrunning, which is the act of making investment decisions based on insider knowledge.

In the case this case, Alameda Research is accused of making investment decisions with its insider knowledge of which new cryptocurrency tokens were being listed on the FTX exchange. Over the course of the last two days of the fallout following the declared bankruptcy by SBF, the former CEO has taken to his Twitter account to post "what happened" over two days, followed up by a few posts on what his goals are, with one of them being "is to do right by customers" and that "I'm meeting in-person with regulators and working with the teams to do what we can for customers. And after that, investors. But first, customers."

On November 16, SBF tweeted that his goal is to "clean up and focus on transparency," which was followed by a longer tweet posted a few hours later that claimed FTX was "handling ~$10b/day of volume and billions of transfers. But there was too much leverage--more than I realized. A run on the bank and market crash exhausted liquidity. So what can I try to do? Raise liquidity, make customers whole, and restart."

Followed by, "Maybe I'll fail. Maybe I won't get anything more for customers than what's already there. I've certainly failed before. You all know that now, all too well. But all I can do is to try. I've failed enough for the month. And part of me thinks I might get somewhere."

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Jak joined the TweakTown team in 2017 and has since reviewed 100s of new tech products and kept us informed daily on the latest science, space, and artificial intelligence news. Jak's love for science, space, and technology, and, more specifically, PC gaming, began at 10 years old. It was the day his dad showed him how to play Age of Empires on an old Compaq PC. Ever since that day, Jak fell in love with games and the progression of the technology industry in all its forms. Instead of typical FPS, Jak holds a very special spot in his heart for RTS games.

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