Headline RoundupNovember 29th, 2022

Here's What We Know About the FTX Collapse

Summary from the AllSides News Team

In the complicated world of cryptocurrency, what should we make of FTX's demise?

In Summary: The cryptocurrency exchange, which had an estimated value of $32 billion earlier this year, recently filed for bankruptcy after freezing customer withdrawals and reports that it spent customer funds on risky investments. That followed a rapid rise from its founding in 2019 to multi-million dollar advertising deals and becoming the world's third-largest crypto marketplace. Because FTX is based in the Bahamas, it's largely shielded from U.S. regulations on trading and selling investments to the public.

By the Numbers: Founder Sam Bankman-Fried is accused of transferring roughly $10 billion of customer funds from FTX to his investing company, Alameda Research. At least $1 billion of customer funds has vanished from FTX. Before the crash, he donated roughly $40 million to Democrats in the 2022 election cycle, making him the party's second-ranked donor behind George Soros. He also made seven-figure grants to news sources such as ProPublica and The Intercept.

What's Next: The Manhattan U.S. attorney’s office is now investigating FTX’s collapse. It's unclear if Bankman-Fried will be charged, but experts agree that the incident will lead to heavier crypto regulation. Currently, no protections exist for those who lost money.

How the Media Covered It: FTX's collapse and corruption have been a focus of coverage across the spectrum. Some right-rated sources questioned whether Bankman-Fried's donations to news companies had made them less likely to investigate him.

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