The FTX Collapse: A ‘Perfect Crisis’ With Many Unanswered Questions

Just as the pandemic was used to deny Americans their constitutional rights and create the global recession, will the FTX situation play a similar role to invalidate cryptocurrencies?

This illustration photo shows a smartphone screen displaying the logo of FTX, the crypto exchange platform, with a screen showing the FTX website in the background in Arlington, Va., on Feb. 10, 2022. Olivier Douliery/AFP via Getty Images

Commentary

As the impact of the FTX collapse continues to unfold, there are several aspects of the event that reach well beyond the cryptocurrency world. And as more information comes out, the more important the situation appears.

A Few Facts and Curious Coincidences

First of all, the massive financial scandal has left investors with billions of dollars in losses. That in itself makes the debacle one of the costliest on record. The speed at which FTX both attracted investors and lost all of its money is also unprecedented. Its CEO, Samuel Bankman-Fried (also known by his initials SBF), went from a net worth of up to $26 billion to essentially broke in a matter of days.