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Ask HN: What the heck happened to FTX? (ELI5)
Alright, I just crawled from under a rock.
Reading all these articles and tweets about FTX and Binance -- and frankly I have no freaking idea what is the background.
So would any kind soul enlighten me on what's the backstory here?
PS: I think there is a should be a service that provides you a background for any given news article. You paste in the url and it gives you the "need to know before you read this story"
- wmf 4y agohttps://newsletter.mollywhite.net/p/ftx-explainer https://newsletter.mollywhite.net/p/ftx-explainer
- eaglehead 4y agoThank you.
- legitster 4y agoSuper 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.
- aaron695 4y ago
- russfink 4y agoThis 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/comment/ivs2i9c/ https://www.reddit.com/r/explainlikeimfive/comments/yr3ypv/c...
- Maursault 4y agoPretty 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] [1] https://www.youtube.com/watch?v=DSLmnH0QKPk https://www.youtube.com/watch?v=DSLmnH0QKPk [2] https://www.youtube.com/watch?v=CnbDeQRsMJY https://www.youtube.com/watch?v=CnbDeQRsMJY