{"id":512586,"date":"2022-11-19T19:37:36","date_gmt":"2022-11-19T16:37:36","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/i-predicted-ftxs-collapse-a-month-before-it-happened\/"},"modified":"2022-11-19T19:37:36","modified_gmt":"2022-11-19T16:37:36","slug":"i-predicted-ftxs-collapse-a-month-before-it-happened","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/i-predicted-ftxs-collapse-a-month-before-it-happened\/","title":{"rendered":"# I predicted FTX&#8217;s collapse a month before it happened"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a26265039089\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a26265039089\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/i-predicted-ftxs-collapse-a-month-before-it-happened\/#%E2%80%9D_I_predicted_FTXs_collapse_a_month_before_it_happened_%E2%80%9C\" >&#8221; I predicted FTX&#8217;s collapse a month before it happened &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/i-predicted-ftxs-collapse-a-month-before-it-happened\/#Top_executives_leaving\" >Top executives leaving<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/i-predicted-ftxs-collapse-a-month-before-it-happened\/#Poor_business_performance\" >Poor business performance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/i-predicted-ftxs-collapse-a-month-before-it-happened\/#How_we_can_fix_this\" >How we can fix this<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/i-predicted-ftxs-collapse-a-month-before-it-happened\/#Whats_next\" >What\u2019s next<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_I_predicted_FTXs_collapse_a_month_before_it_happened_%E2%80%9C\"><\/span>&#8221; I predicted FTX&#8217;s collapse a month before it happened &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTEvMDc4ODljYTgtZjRiNi00OTI5LTg2ODEtYTA2OTMxODMzMDJkLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-887bb764>The collapse of FTX has shown that where there\u2019s smoke, there\u2019s fire.<\/p>\n<p>In a year filled with jaw-dropping unveilings, none compare to the bewildering fall of Sam Bankman-Fried\u2019s FTX exchange. While many were stunned, there were a few tell-tale signs that may have indicated not everything was peachy-perfect over at FTX headquarters.<\/p>\n<p>These issues began to compound and, on Oct. 5, I published a detailed commentary about my decision to begin pulling funds out of FTX and short FTT. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Im taking all of my capital out of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/FTX_Official?ref_src=twsrc%5Etfw\">@FTX_Official<\/a> and going short <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24FTT&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$FTT<\/a> <\/p>\n<p>FTX has been swinging and missing all year long on so many activations<\/p>\n<p>AND<\/p>\n<p>Something shady is going on at FTX.<\/p>\n<p>Here&#8217;s 12 reasons why I&#8217;m completely out on the FTX mafia and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/SBF_FTX?ref_src=twsrc%5Etfw\">@SBF_FTX<\/a>: <\/p>\n<p>[1\/20] <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/ECrhQn5Rjx\">pic.twitter.com\/ECrhQn5Rjx<\/a><\/p>\n<p>\u2014 Ishan B (@Ishanb22) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Ishanb22\/status\/1577699083808083969?ref_src=twsrc%5Etfw\">October 5, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>The bottom line is that things didn\u2019t seem right. A month later, we\u2019re witnessing the fallout.<\/p>\n<p>This is not meant to be a victory lap, but rather an opportunity to learn from our collective mistakes and create the systems necessary to prevent this level of fraud from h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ening again.<\/p>\n<p>Now, we have strong allegations that what happened constituted fraud \u2014 at the highest levels, by the least conceivable party. Here are some reasons these circumstances were foreseeable, and how they can be fixed in the future.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Top_executives_leaving\"><\/span>Top executives leaving<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While hindsight is 20\/20, the string of top FTX executives leaving should have been a giant red flag. Alameda Research CEO Sam Trabucco announced his resignation on Aug. 24, followed by FTX US CEO Brett Harrison on Sept. 27. On Oct. 3, it was reported that FTX\u2019s head of over-the-counter and institutional sales, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.theblock.co\/post\/174513\/ftxs-head-of-otc-and-institutional-sales-has-quietly-left-the-firm\">Jonathan Cheesman<\/a>, had also left the firm.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Will SBF face consequences for mismanaging FTX? Don\u2019t count on it<\/em><\/strong><\/p>\n<p>Cheesman and Harrison were at the firm for a little more than a year. Without knowing the specifications of their deals, equity is typically vested over a multi-year horizon. So, why would top executives leave without fully vesting their equity in a rapidly growing, $30 billion firm?<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Poor_business_performance\"><\/span>Poor business performance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As a private company, it was difficult to fully grasp the financial outlook for FTX, but there were signs of trouble. <\/p>\n<p>First, trading volume was down significantly. It had decreased to December 2020 levels. Levels that hadn\u2019t been seen since the monumental bull run began. <\/p>\n<p>Lack of volume directly correlates to lower revenue. This, coupled with the growth of decentralized competitors such as Gains Network and GMX, meant that the business could not have been at its healthiest \u2014 but FTX was still spending as if it was:<\/p>\n<ol>\n<li>The FTX NFT marketplace gained minimal traction but must have been quite an expensive endeavor. <\/li>\n<li>They had recently agreed to a $212 million deal for naming rights to the Miami Heat arena. <\/li>\n<li>FTX Ventures, the company&#8217;s venture capital arm, had consistently made large, late-stage investments. Massive check sizes into highly illiquid positions. <\/li>\n<\/ol>\n<p>FTX US then launched FTX stocks to offer U.S. investors exposure to equities \u2014 a weird product extension for a crypto-native firm. Why not provide more crypto-related products or create solutions to help the industry? Even then, it seemed like a weak attempt at recovering some lost revenues from the reduction in volume.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_we_can_fix_this\"><\/span>How we can fix this<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A wise man once said, \u201cLife\u2019s greatest lessons are usually learned at the worst times from the worst mistakes.\u201d <\/p>\n<p>So, what are the most important lessons to learn from these times? Decentralization. Decentralization. Decentralization.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Let\u2019s move on from FTX\u2019s collapse and get back to the basics<\/em><\/strong><\/p>\n<p>This has been at the core ethos of the decentralization of finance, yet we still need a Lehman Brothers-type collapse to re-learn the importance of this lesson. <\/p>\n<p>Decentralization necessitates a trustless environment where information can be verified at any time. For example, if you think that FTX might have a $5 billion-plus hole in its balance sheet, you need to be able to verify how true that is. The problems arise when these simple questions are purposely obscured to defraud institutional and retail investors. <\/p>\n<p>Why is decentralization important?<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Oke so dk if anyone noticed that FTX\/Alameda repaid 18.5m <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24MIM&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$MIM<\/a> yesterday, leaving just abt 33m left to repay\u2026<\/p>\n<p>Now, given 75% LTV, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24FTT&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$FTT<\/a> could theoretically damp all the way to $7.84 until h-factor below 1 \u2014 tho Abra is supposedly working w them to repay asap<\/p>\n<p>Should prob b fine <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/ntrab01cdU\">https:\/\/t.co\/ntrab01cdU<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/bN8c9Wcfbo\">pic.twitter.com\/bN8c9Wcfbo<\/a><\/p>\n<p>\u2014 Barry Fried  (@BarryFried1) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/BarryFried1\/status\/1589382985157324800?ref_src=twsrc%5Etfw\">November 6, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Decentralized finance (DeFi) doesn\u2019t give special treatment. It doesn\u2019t trust you no matter how many times you\u2019ve been on CNBC or <em>Bankless<\/em>. If you have a loan, it must be repaid or it will be liquidated. <\/p>\n<p>Decentralized finance is the great equalizer. It continued running without any hiccups amidst one of the most monumental, unforeseen collapses in the history of finance. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">You know what handled all withdrawals, liquidations, and market volatility flawlessly today? With transparency, and efficiency to boot?<\/p>\n<p>Compound, and many other DeFi protocols.<\/p>\n<p>\u2014  Leshner (@rleshner) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/rleshner\/status\/1590105221371334656?ref_src=twsrc%5Etfw\">November 8, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Whats_next\"><\/span>What\u2019s next<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Many DeFi advocates believe that we are simply speed-running the history of finance and all the lessons we\u2019ve learned about money, finance, economics, etc., over the last 2,000 years. That\u2019s a possibility.<\/p>\n<p>While the implosion of FTX may be a deep blemish on the industry as a whole, there&#8217;s still much to be excited about. Let\u2019s take this as an opportunity to double down on the importance of self-custody, trust minimization, and permissionless, open-source access \u2014 the true ethos of this space. <\/p>\n<p>Lastly, let&#8217;s remember never to trust larger-than-life figures that evolve from the crypto space, no matter how effectively altruistic or perfect they may seem. Trust no one and verify. <\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Ishan Bhaidani<\/strong> is a content manager at Serotonin, a Web3 marketing agency. He graduated from the University of Texas at Austin\u2019s McCombs School of Business with a BBA in finance and statistics.<\/div>\n<\/div>\n<p><em>The opinions expressed are the author\u2019s alone and do not necessarily reflect the views of Cointelegraph. This article is for <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> information purposes and is not intended to be and should not be taken as legal or investment advice.<\/em><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/i-predicted-ftx-s-collapse-a-month-before-it-happened\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; I predicted FTX&#8217;s collapse a month before it happened &#8220; The collapse of FTX has shown that where there\u2019s smoke, there\u2019s fire. In a year filled with jaw-dropping unveilings, none compare to the bewildering fall of Sam Bankman-Fried\u2019s FTX exchange. While many were stunned, there were a few tell-tale signs that may have indicated&#8230;<\/p>\n","protected":false},"author":1,"featured_media":512587,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTEvMDc4ODljYTgtZjRiNi00OTI5LTg2ODEtYTA2OTMxODMzMDJkLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74863,107431,88323,135234,89897,117,70610,73711],"class_list":["post-512586","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-cryptocurrencies","tag-cryptocurrency-investment","tag-financial-systems","tag-ftx","tag-sam-bankman-fried","tag-business","tag-finance","tag-investments"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512586","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=512586"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512586\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/512587"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=512586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=512586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=512586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}