thecoinrepublic.com
- There’s one important lesson that is pretty obvious in retrospect and that I can say with total confidence will not be learned- David Schwartz.
An unprecedented event in the crypto market has shaken the market and created a wide variety of opinions about FTX collapse. Chief Technical Officer Ripple David Schwartz shared his thoughts on the collapse of the FTX exchange.
While stating that everyone should learn several lessons from the FTX collapse noted that “There’s one important lesson that is pretty obvious in retrospect and that I can say with total confidence will not be learned.”
There are a few lessons that should be learned from the FTX fiasco, but there's one important lesson that is really pretty obvious in retrospect and that I can say with total confidence will not be learned. 1/4
— David "JoelKatz" Schwartz (@JoelKatz) November 22, 2022
Schwartz elaborated that ” If you hold billions of dollars of other people’s money for indefinite periods, the temptation to speculate with those funds is irresistible. Verifiable checks will only be sufficient if there are verifiable checks that make such risk-taking virtually impossible.”
David mentioned, “Regulation that punishes after the fact wouldn’t catch it. Investor due diligence won’t either. Of course, many people will say it could be, and likely is, happening, but they’ll be shouted down by accusations of sowing FUD or upsetting a system making people money.”
Regulation that punishes after the fact won't catch it. Investor due diligence won't either. Of course, many people will say that it could be, and likely is, happening, but they'll be shouted down by accusations of sowing FUD or upsetting a system that is making people money. 3/4
— David "JoelKatz" Schwartz (@JoelKatz) November 22, 2022
The CTO stressed, “This kind of thing will always happen unless it cannot happen,” He added, “The temptation is irresistible. That is one of the most important lessons of FTX. But most people will actively choose not to learn this lesson because of, among other things, the telephant in the room.
Several investigation agencies are investigating the bankrupt FTX group. In the United States, the Department of Justice(DOJ), the Securities and Exchange Commission(SEC), the Commodity Future Trading Commission(CFTC) and the Security and Exchange Commission of Bahamas are actively working to find out whether FTX misused users’ funds or not.
The globally popular crypto exchange FTX filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code in the District of Delaware on November 11, 2022.
Sam Bankman Fried Ex.The Chief Executive Officer of FTX was the one to initiate the bankruptcy procedure, and after a few hours of filing, Sam resigned from the post of CEO.
Earlier on November 20, 2022, FTX’s official Twitter handle notes that “Exchanges should be aware that certain funds transferred from FTX Global and related debtors without authorization on 11/11/22 are being transferred to them through intermediate wallets.”
It further quoted, “Exchanges should take all measures to secure these funds to be returned to the bankruptcy estate.”
(1/2) Exchanges should be aware that certain funds transferred from FTX Global and related debtors without authorization on 11/11/22 are being transferred to them through intermediate wallets.
— FTX (@FTX_Official) November 20, 2022
As per the reports of TheCoinrepublic on November 12, 2022, the Miami Heat, one of the top NBA teams, cut ties with FTX Exchange.
The earlier signed this deal for 19 years, a $135 million agreement in 2021, and after the first slot of payment of $14 million was completed and the firm was about to pay $5.5 million in the upcoming year.