When it comes to FTX, it is hard to find anyone that is not aware of the problems that it is experiencing. There are many bankruptcies that it has experienced and even one that was involved with LUNA and UST. However, this is not all. Read on to learn about the history of the FTX and its impact on the UST and LUNA.
FTX’s bankruptcies
Cryptocurrency exchange FTX filed for bankruptcy protection last week. The company listed liabilities of $10 billion to $50 billion and estimated assets of at least $10 billion. FTX’s CEO Bob Ray says his immediate priorities are to locate assets, cooperate with regulatory investigations, and find the money to pay customers.
FTX’s bankruptcy filings come at a time of turmoil for the crypto industry. The market has been experiencing a series of crash-like meltdowns. These have left many investors frustrated and unable to withdraw funds from the exchange. In a recent CoinDesk report, FTX’s situation was compared to the TerraUSD crash in 2022.
Bankman-Fried’s FTX empire slid into a chaotic bankruptcy. Several FTX-linked companies filed for Chapter 11 within 10 days of their initial court appearance. Some of the largest unsecured creditors of FTX were also affected by the filing.
FTX founder Sam Bankman-Fried is facing criminal charges. He is likely to be extradited to the U.S., where he may face charges of securities fraud and wire fraud.
UST traded at FTX and KuCoin
In the aftermath of the FTX implosion, UST has continued to be traded on KuCoin. The exchange’s leveling system allows traders to gain lower fees.
FTX’s token, FTT, is also a token that is used by the company to offer discounted trading fees. It has been falling in value recently, accompanied by significant price discovery.
Although FTX’s token is still traded at KuCoin, a number of other major exchanges have suspended trading. Besides, the FTX-created FTT token is now being investigated by the SEC and the Department of Justice.
FTX’s stablecoin reserve is at the lowest it has been in a year. This could pose problems for the company’s creditors. Several of the companies that were affiliated with FTX have had their assets frozen. They are attempting to discharge their creditors in bankruptcy court.
KuCoin’s founders have a strong reputation from the industry giants they’ve worked for. They’ve partnered with Singapore-based digital asset custodian Onchain Custodian.
LUNA traded at FTX and KuCoin
Terra(LUNA) is an open source decentralized blockchain protocol that provides a vibrant community of dApps. The network uses ground-breaking technologies and tokens to facilitate transactions.
Terra was launched by a South Korean-based company, Terraform Labs, to create a peer-to-peer electronic cash system. The ecosystem consists of several projects including decentralized finance platforms and non-fungible token collections. In March 2022, the market capitalization of the Terra ecosystem surpassed $180 million. However, it collapsed in May, destroying billions of investments.
When the UST (TerraUSD) peg was broken, investors began to lose faith in the LUNC tokens. As a result, LUNC became hyperinflationary. A group of exchanges froze Terraform Labs accounts. After the collapse, Do Kwon, founder of Terraform Labs, contacted the top five cryptocurrencies exchanges in Korea to discuss the problems facing the Terra network.
The Terra community voted in favor of a recovery plan that was supposed to return the UST and LUNC pegs. The vote passed with 65% of the vote.
Hacken contacted Kraken’s security about the transaction
If you’re not familiar with crypto exchange Kraken, you may not have heard of its recent settlement with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). The settlement includes a payment of $362,159 to settle potential civil liability. Additionally, the exchange has committed to invest $100,000 in compliance controls.
The Kraken team has been able to track down the identity of the person who hacked the crypto exchange FTX. The team found that the hacker funded a wallet with 500 TRX through a Kraken user’s account. It was later revealed that FTX’s owner, Sam Bankman-Fried, is suspected of committing the attack.
While Kraken has taken some precautions to prevent this from happening in the future, it’s not the only centralized exchange that’s under scrutiny. JPMorgan recently said that regulatory initiatives for the crypto market are likely to be accelerated. BlockFi, a crypto lender that filed for bankruptcy protection, is also under scrutiny. Similarly, FTX is reportedly under investigation by the Royal Bahamas Police Force.
