The cryptocurrency exchange FTX went from a major market force propping up the vast fortune of the No. 2 Democratic donor to filing for bankruptcy in just a matter of days.
FTX has been the focus of controversy this month as the company struggled with diminishing value and investor trust while also feeling increased pressure from lawmakers and regulators over alleged deceptive conduct. The company declared bankruptcy and removed its founder from his leadership role Friday.FTX was founded in 2019 by Sam Bankman-Fried as a Bahamas-based crypto exchange that allows users to trade cryptocurrency.
The company, however, attracted scrutiny from regulators. The state of Texas announced in October that it was investigating if the exchange had been selling unregistered securities. Some investors — most notably, rival crypto exchange Binance — responded to the revelation by selling holdings in FTT, which caused the token's value to drop to unsustainable levels.
FTX began looking for ways to raise liquidity and stave off a run. Binance, a major rival, announced on Nov. 8 that it had agreed to a nonbinding agreement to acquire FTX. The agreement left the company's U.S. branch out of the deal.
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