Chris Sullivan, an investment advisor representative of Hyperion wealth management, reveals some inside details of FTX and its former CEO Sam Venkman in this video. He also discusses the troubles plaguing the crypto lender Genesis and its parent company, digital currency group.
FTX Implosion and Exploiter
The collapsed crypto exchange FTX had its bankruptcy hearing on November 23. John J. Re ID is now the new CEO of the exchange and has brought in James Bromley, a partner at Sullivan and Cromwell LLP, to represent FTX in the bankruptcy hearing. An exploiter was able to steal $600 million worth of digital assets from the bankrupt exchange.
Lessons Learned
The moral of the story is that you can’t trust anything but code and “not your keys, not your crypto” is not good enough. If businesses supporting the ecosystem and investors want to be protected and see adoption of crypto increase, better measures need to be taken to prevent fraud, waste, and abuse.
Terra Luna and Other Scandals
Chris Sullivan also discusses the differences between the FTX scandal and others such as Terra Luna and Celsius, Voyager. He argues that while the failure of Terra Luna was a fancy Ponzi scheme, it didn’t involve fraud or misleading anyone. On the other hand, the large centralized exchange FTX had the promotion of media outlets such as Bloomberg and Forbes, and was a World Economic Forum, corporate sponsored entity. This makes it more difficult for the public to know not to trust them.
Conclusion
The FTX scandal highlights all of the risks of centralization. It is not the user’s fault for being misled, but rather the fault of the centralized exchange for promoting themselves as trustworthy and then committing fraud. The public needs to be aware of the risks and take necessary precautions to protect themselves and their investments.
