The value of cryptocurrencies has fallen dramatically in the last week after people lost confidence in the crypto platform FTX. Almost all cryptocurrencies have been affected, including Bitcoin.
There were hopes that rival company Binance could buy FTX and solve some of the cash-flow problems. However, they pulled out of the deal citing concerns about due diligence.
FTX and its founder Sam Bankman-Fried are reported to be facing an investigation by the SEC. They are looking into whether customers’ money has been mishandled, and the relationship that FTX has with other businesses owned by Bankman-Fried.
Reports came in on Friday that FTX filed for bankruptcy in the United States. Bankman-Fried has also stepped down as CEO of the company. According to a statement released by the company, the focus is still on returning as much money to customers as possible. Even so, it is likely that people are not going to get back all the money that they have invested.
Even trading platforms that have no connection to FTX have seen the value of cryptocurrency fall as a result of this whole situation. Confidence in crypto has fallen, and it may take some time for it to come back.