This also is good. I googled “ELI5 FTX”. Regarding the comment below, Binance was asked to buy FTX, and they inspected their books - and found $6B missing. Whether that was embezzlement or poor reinvestment, I don’t know.
https://www.reddit.com/r/explainlikeimfive/comments/yr3ypv/c...
Pretty confusing, but finance always seemed like voodoo to me.
Here is an explanation that seems biased against CZ (Changpeng Zhao).[1]
Here is an explanation that seems biased against SBF (Sam Bankman-Fried).[2]
Super oversimplification:
FTX was an exchange for Cryptos. No problems there. They also offered a coin of their own. Also, no problems.
But then they borrowed a bunch of money against the value of their coin. Fundamentally not good, because it means they now owe customers more money than the customers put in.
There was also a trading house that they ran on their own exchange, a competitor who might have triggered the collapse as a prank (Binance), and an over exuberant owner who always seemed to be above this sort of mess.
undefined
https://newsletter.mollywhite.net/p/ftx-explainer