FTX collapse has undone years of progress, says crypto insider

Rival exchange Binance offered a lifeline through a non-binding acquisition offer, which it quickly withdrew after discovering more serious problems with the doomed exchange. On Friday, Bankman-Fried – popularly known as SBF – filed for bankruptcy protection, and he now faces possible civil or criminal charges.

In the wake of further revelations and reports over the weekend, many now see FTX, once a bastion of trust in the embattled crypto industry, as a blow-up that was just waiting to happen.

“It’s hard to tell what are facts and what are rumours,” Brian Mosoff, CEO of Ether Capital, told Wealth Professional. “Some things are more concrete that we can lean on.”

‘All that trust is gone’

Based on reliable news reports, Mosoff says some crypto assets held by FTX were moved without the correct permissions after SBF’s bankruptcy filing. Who’s responsible and how those assets can be clawed back is still unclear, but another U.S. crypto exchange Kraken claims a number of accounts it hosts had interacted with the wallets concerned.

“Once FTX filed for bankruptcy, everything should have been frozen,” he says. “Users aren’t allowed to withdraw from their accounts on the exchange, even though the assets are technically theirs.”