The FTX collapse has sent tremors across the crypto industry. On November 11, 2022, the company filed for Chapter 11 bankruptcy protection.
The firm’s value quickly dropped from $32 billion to a situation of utter bankruptcy in a matter of days, bringing founder and CEO Sam Bankman Fried’s $16 billion net worth down to almost nothing. It has been estimated that the fallout from FTX’s abrupt collapse will have an effect on cryptocurrencies for a very long time to come, and cause wider market declines.
Sam Bankman-Fried is accused in a class-action lawsuit of developing a fraudulent cryptocurrency scheme intended to take advantage of unsophisticated investors from all across the nation.
Following a string of contentious public appearances, former FTX CEO Sam Bankman-Fried (SBF) has come under fire this week, yet again. Mike Novogratz of Galaxy Digital is the most recent person to criticize the former crypto kingpin. A storm of criticism was aimed at him over his interview with Andrew Ross Sorkin at the annual DealBook Summit hosted by the New York Times.
Novogratz, echoing the sentiments of many notable members in the crypto world, stated that the former FTX CEO must serve time in prison:
“The reality is that Sam and his cohorts perpetuated a fraud. He stole money from people, people should go to jail.”
Additionally, the co-founder of Tether, Reeve Collins, has expressed his comments on the decline of FTX. Collins claimed that the fall of FTX stunned him and other members of the cryptocurrency sector in a CNBC’s Squawk Box interview. He pointed out that Sam Bankman-Fried was to blame for the collapse of the exchange.
“He is responsible because he was the CEO [of FTX]. He either committed gross negligence, absolute terrible management, or fraud. Either one at that level should end you up in jail,” Tether co-founder said.
Collins stressed the dangers associated with storing cryptocurrency on exchanges. The co-founder of Tether asserts that users of cryptocurrency exchanges who store their holdings face the same dangers as FTX users.
“People using these exchanges as a bank account is risky. Do not keep your coins on an exchange,” said Collins.
Sam Bankman-Fried had recently portrayed an apologetic face for being uninformed of the full circumstances at FTX. In a tweet on Friday, Maxine Waters, chair of the House Financial Services Committee, praised Bankman-Fried’s “candid” remarks regarding the FTX fiasco and invited him to the public hearing on December 13.
The former FTX CEO hinted this week that he might appear at upcoming congressional hearings, but he made no mention of whether or not he would accept Waters’ invitation. Furthermore, it is unknown if Bankman-Fried, who has been speaking with journalists stationed in The Bahamas, will travel to America for a hearing.
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