D. Brian Blank Mississippi State University Brandy Hadley Appalachian State University
The fast-paced cryptocurrency world can make or break huge amounts of money in a matter of seconds. FTX, the second-largest crypto exchange, was valued at over US$30 billion in November 2022. FTX, along with over 100 companies that were connected to it, was in bankruptcy proceedings by Nov. 14. Brandy Hadley, D. Brian Blank, and Brandy Hadley are professors that study finance and investing. They explain how and why this incredible collapse happened, what effect it might have on the traditional financial sector and whether you need to care if you don’t own any cryptocurrency.
1. What has happened?
Sam Bankman-Fried, a 2019 founder of FTX was responsible for one the most important cryptocurrency exchanges.
Many crypto investors trade and keep their cryptocurrency on FTX, which is similar to the New York Stock Exchange. Alameda Research was founded by Bankman-Fried, which is a hedge funds that invests in cryptocurrencies.
These two companies would either be completely separate in the traditional financial sector or have divisions between them. But…