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What is going on at the bankrupt cryptocurrency exchange Futures Exhange (FTX)?

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After undergoing the cryptocurrency equivalent of a bank run, the collapsing cryptocurrency trading company Futures Exhange is now billions of dollars in the hole.

The exchange, which was once among the biggest in the world, filed for bankruptcy last week. It is also found that CEO and founder of the exchange also left. A few hours later, the trading company claimed that monies had vanished as a result of “unauthorised access.” According to analysts, hundreds of millions of cash could have disappeared.

The collapse of the once-dominant exchange is having a profound impact on the sector. Here is an overview of the company’s demise so far:

HOW COME FTX WENT BANKRUPT?

Customers abandoned the exchange out of concern that it lacked adequate money. Also FTX decided to sell itself to competitor cryptocurrency exchange Binance. But while Binance was still conducting its due diligence on FTX’s balance sheet, the deal fell through.

According to its bankruptcy petition, Futures Exhange cited more than 130 linked firms worldwide and valued its assets between $10 billion and $50 billion.

On Friday, the bankruptcy case was filed in Delaware by FTX and dozens of its related businesses, including founder Sam Bankman-hedge Fried’s fund, Alameda Research.

The events of the past week were a startling turn of events for Bankman-Fried, who earlier this year was hailed as something of a saviour when he assisted in saving a number of cryptocurrency businesses that were having financial difficulties. He has a current estimated net worth of $23 billion and has long supported Democrats in politics.

WAS FUTURES EXHANGE ALSO HACKED?

After the business sought Chapter 11 bankruptcy protection on Friday, Futures Exchange acknowledged on Saturday that someone had gained illegal access to its accounts.

Social media users began debating whether the exchange had been compromised or whether a staff member had embezzled money. A possibility that bitcoin researchers couldn’t completely rule out.

Uncertainty exists around the precise amount of money involved, however analytics company Elliptic estimated on Saturday that $477 million was missing from the transaction. John Ray III, the new CEO of FTX, announced that the company was stopping all trading and withdrawals and taking action to protect clients’ investments.

ARE MY BTC SAFE?

Bitcoin owners should be fine provided they keep their holdings away from exchanges like Futures Exhange , which essentially functions as a “crypto-casino gaming website,” according to Cory Klippsten, the CEO of financial services company Swan Bitcoin.

Klippsten declared that “every exchange is a security risk.” Some are more trustworthy than others, but he claimed that taking charge of your digital assets is a superior choice. You can choose to take self-custody with bitcoin and remove your coins from the exchange, he explained.

IS FUTURES EXCHANGE A MATTER OF INVESTIGATES?

Further aggravating FTX’s problems, the Royal Bahamas Police Force announced Sunday that it is looking into the matter. The exchange had relocated its offices to the Caribbean nation last year. The police department said in a statement on Sunday that it was collaborating with the Bahamas. In relation to the exchange, securities regulators are to “examine if any criminal misbehaviour happened.”

ARE THERE ANY OTHER INVESTIGATORS ABOUT FUTURES EXCHANGE?

According to a person familiar with the situation who spoke to The Associated Press last week on the condition of anonymity because they could not discuss specifics of the investigations publicly, the U.S. Department of Justice and the Securities and Exchange Commission started looking into Futures Exhange even before the bankruptcy filing and missing funds. They were doing this to find out whether any criminal activity or securities offences were committed.

WHAT ARE THE CONSEQUENCES?

The prices of bitcoin and other digital currencies have decreased, and businesses who supported Futures Exhange are writing down investments. Politicians and government officials are pressing for tighter regulation of the unwieldy sector. FTX announced on Saturday that it was transferring as many identifiable digital assets as possible to a new “cold wallet custodian,” which is essentially a method of offline asset storage devoid of remote control.

A number of the sports-related deals that Futures Exhange had entered into are now in trouble. The Miami Heat of the NBA and Miami-Dade County made the decision on Friday to end their partnership with FTX and rename the team’s arena. Mercedes announced earlier on Friday that it would immediately take the FTX logos off of its Formula One vehicles.

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