Regarding the FTX Scandal, Crypto Influencers: Don't Buy Crypto Just yet!

in blurt-network •  last year 
Crypto influencer Ben Armstrong, nicknamed Bitboy, appealed to investors not to buy crypto assets before it is clear about the extent of the damage caused by the FTX scandal.

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Before the FTX cryptocurrency exchange went bankrupt due to misuse of customer funds, Armstrong had frequently expressed suspicions about FTX and its CEO Sam Bankman-Fried or SBF.

FTX Scandal Has Been Read
According to U Today, Armstrong said Bankman-Fried is lobbying US regulators to set rules that limit the crypto industry. Armstrong promised to expose another bad behavior by the SBF.

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Additionally, in October, Armstrong claimed FTX tricked its customers after the exchange's API was exploited. Not only that, Armstrong accused FTX of carrying out a pump and dump scheme for crypto assets traded on the exchange.

Armstrong's opinion on SBF and FTX caught the attention of Ripple's CTO, David Schwartz. He said Armstrong reminded crypto investors that Bankman-Fried was a "devil" long before the FTX scandal filed for bankruptcy.

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In addition to inviting investors not to buy cryptocurrencies and waiting while watching the situation, Armstrong also called for no more market makers who have great power over market price movements.

It is known, Alameda Research, a trading firm founded by SBF in 2017, is a market maker for a number of trading pairs, both on FTX and on other crypto exchanges.

Allegedly, Alameda Research suffered heavy losses as a continuation of the fall of the Terra ecosystem (LUNA) so that SBF used customer funds to cover these losses.

Recently, via Twitter, Bankman-Fried admitted that FTX was experiencing a liquidity crisis and did not have sufficient cash to meet customer withdrawal requests.

"I'm still trying to figure out every detail, but in general, I made a mistake twice. There was an internal naming error for the bank account so I expect user margins to be lower than it actually is,” explained SBF.

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Vice reported that, on Wednesday (11/09/2022), Sequioa Capital, the venture capital firm that invested in FTX, rated the investment zero.

In a letter addressed to the company's investors, Sequioa Capital said the liquidity crisis had led to FTX's bankruptcy. Based on this understanding, they gave a zero value for this investment in FTX, explained Sequioa Capital.

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