Crypto exchanges and the betrayal of trust
Last week the market got hit with it huge blow since the death spiral of LUNA. Right now, with the way things are going, it is advisable to uninstall the FTX app on your phone because the exchange platform was hacked over the weekend and some malware might be on that app. Everything that happened to FTX didn't just start last week, it started with a coindesk article that revealed Alameda's balance sheet which made the crypto community full of questions about what is going on with FTX.
One of the curiosity was that want to know if the FTX customer's asset is finding their way to Alameda. It has been revealed to us that FTX used $10 billion to prop Alameda. You should that Alameda research is a crypto trading company founded by Sam and his friend in 2018, they would buy crypto in use and sell it in Japanese at a higher price. The main catalyst that led to FTX's collapse was CZ's tweet that they will be liquidating the FTT token position following the revelation of Alameda's balance sheet.
We actually don't know why Sam has not been arrested, some people suggest is because of its political influence in the US. We don't know when the billions of dollars of customers' funds will be recovered and have much damage will this do to the crypto market. The company behind Solana has confirmed that they have more than enough assets to continue to run for more than 30 months. FTX is one of the biggest investors of Aptos, they are also one of the biggest investors in Near protocol, Ape coin, and Algo.
Recently, we are seeing most crypto exchanges promising to disclose their balance sheet, certainly, the customer are worried and they don't want to experience the same thing that happens to FTX. The first crypto exchange platform to disclose its reserve is Binance, they have huge amount of worth crypto asset. Crypto.com is the second crypto exchange platform to reveal its balance sheet, and its balance sheet is huge. Some weird things are happening, people started huge crypto assets being transferred from one exchange platform to another.
This has made many investors start to think these crypto exchanges are sharing their crypto to make sure their reserves look better than it actually is. This speculation has made investors start to withdraw their assets from these exchanges, this could lead to issues if the exchange doesn't have their crypto one-to-one..¥