Special Post: The Collapse of FTX

[Note: the weekly headlines post will be published on Monday the 14th]

The third largest exchange, FTX, and its origin trading company, Alameda Research, filed for bankruptcy.

The tl;dr is that there was a CoinDesk report that questioned the nature of the nature of the assets at Alemeda, which caused a run of confidence for the FTX exchange token, FTT. Alemeda used a substantial sum of FTT as collateral for loans, and as the value began going down, it began a liquidity crunch that fed a crisis of confidence, which led to panic withdrawals on FTX (which did not have full reserves,) and then an industry-wide cascade effect that unraveled in mere DAYS.

Fast-forward to Friday evening, and we have Sam Bankman-Fried (SBF) stepping down as CEO, all withdrawals halted, and the collateral damage is spreading: (Blockfi, which FTX bailed out after the Luna/Three Arrows/Voyager debacle of May/June, has halted withdrawals and they even shut off their credit card to prevent the liability balance sheet from growing (Fold card for the win.)

Expect the regulatory hammer to fall. Just three weeks prior, SBF opined on his views for regulation, which, irony of ironies, may come in the form of legislation that he helped to craft with the US Congress (see Charles Hoskinson’s video below.)

Just when we thought it was safe to go back into the water after the Terra Luna debacle, we get hit by the FTX drive-by shooting.

All of this is a good lesson in third-party risk and doing self-custody of your crypto.

Keep an eye out for any services that uses Fireblocks or Prime Trust as their custodian (Swan Bitcoin and Strike being two such services [Full disclosure, I’ve used both, good services in and of themselves.) As a means of protecting yourself from the contagion spread that’s sure to occur as balance sheets collapse, move your crypto and bitcoin off of those platforms and into self-custodied wallets you control (there is a link below for the Coinomi hot wallet, plus you can also use a cold-wallet service like Nano, Ledger, and many others out there.)

Err on the side of caution- worst case, you miss out on some gains. Best case, you avoid being locked out from access to your assets.

Comments and suggestions, questions, reach out -> hello @ tinycryptoblog.com

Be well and be safe, Everyone.

Follow TinyCryptoBlog – Website | YouTube | BitChute | Odysee | Brighteon | Twitter | Spotify | Facebook | Medium

Commentary on the fallout…

Affected Parties and Collateral Damage

Silvergate Capital says FTX reflects less than 10% of its total deposits from digital asset customers
FTX Collapse Triggers Over 80K Bitcoin Outflow From Exchanges
US Congressman says SEC’s Gensler allegedly had dubious ties to FTX, promises investigation
What You Need to Know About Exchange Tokens After FTX’s FTT Meltdown
SBF’s Wealth Suffers an Estimated 94% Drop After FTX Fiasco
Ledger hardware wallets hit by the FTX earthquake


-Hundreds of Millions of Dollars Drained From FTX Overnight in ‘Unauthorized’ Transfers
Desperate FTX users employ shady tactics to bypass bankruptcy process
Breaking: Bahamas securities regulator freezes FTX assets

In closing…

Buy store gift cards, earn bitcoin. Use the debit card, earn bitcoin. Get .00005 bitcoin when you sign up


The app that let’s you buy/sell/trade cryptos, earn yields on crypto deposits and take out a crypto-backed loans

Get $10 when you sign up with Strike. Send cash instantly around the world at no cost, and buy bitcoin with only a 1.5% fee


If you’re new to crypto, Coinbase is the easiest way to get started


Binance is a great exchange to buy and sell cryptos


Changelly is a good option for exchanging coins without having to use an exchange

lolli logo

Earn bitcoin while you shop online using Lolli

teepublic logo

Get crypto-themed shirts, stickers, mugs and more at Teepublic


Download the Brave browser and block unwanted ads and earn rewards whileen you browse online 

Exodus-Logo side

Download the Exodus wallet for you PC and smartphone


Download the Coinami wallet for your PC and smartphone

Categories: Exchanges, Weekly Headlines

Tags: ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: