The Case for Banning Crypto For Finance, the Blockchain's Risks Far Outweigh Its Rewards

Document Type

News Article

Publication Date

4-5-2023

Abstract

On November 11, 2022, the cryptocurrency exchange FTX collapsed, nine days after a copy of the balance sheet of its affiliated hedge fund, Alameda Research was leaked. Once it was revealed that Alameda and FTX were significantly intertwined, and that FTX was suffering from serious liquidity shortages, the exchange’s customers rushed to withdraw their funds. Many found that they could not do so. Behind the scenes, Alameda had been hemorrhaging money on bad trades and using FTX customer funds to cover those losses. Sam Bankman-Fried resigned as CEO, and FTX filed for bankruptcy.

Source Publication

Foreign Affairs

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