FTX is arguably one of the biggest financial scandals in the digital age, and the fallout from this collapse exposed a lot of the moving parts behind the scenes. $44 billion dollars were essentially lost overnight, and these four players played a drastic role.
The Four Horsemen: FTX, regulators, Venture Capitalists, the Media
- FTX: CEO Sam Bankman Fried and his executives used customer deposits to cover bad bets.
- Regulators: Failed to protect US consumers from the volatility.
- Venture Capitalists: Continued massive investments into FTX while failing to conduct proper due diligence to make sure that company was actually telling the truth in terms of their financials.
- The Media: Incompetence. They failed to see the fraudulent & illegal actions that were conducted and report them to the public.
- Lessons from the whole event:
- Due your own due diligence and read the fine print.
- Always take something you view online, especially if it requires placing a risky bet involving YOUR money, with a grain (or tablespoon) of salt.
- The FTX’s collapse encourages all of us to place a greater importance on our money and where we feel comfortable investing it and putting it. Always do your research! Keep up with news. The world of decentralized currency is getting more and more fickle, and it is important to pursue financial literacy.