<h2 id="header-0">How did it start?</h2>The Bahamas-based crypto exchange FTX filed for bankruptcy in Delaware, US, on November 11, 2022, becoming one of the biggest scandals in the crypto industry in 2022.The story began on November 2, when <a href="https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/" rel="noopener noreferrer nofollow">CoinDesk revealed</a> in an article that Alameda Research, a trading firm run by SBF, held a $5 billion position in FTT (the native token of FTX). According to the report, Alameda&#39;s investment foundation was also in FTT, the token created by its sister company, rather than in fiat currency or another cryptocurrency. These facts sparked widespread concern in the community about the viability of SBF&#39;s businesses.Following the collapse of Terra (LUNA), <a href="https://www.investopedia.com/binance-to-sell-ftt-6826211" rel="noopener noreferrer nofollow">Binance announced on November 6 that it intends to sell its entire position in FTT,</a> valued at approximately USD 529 million, due to risk management.The CoinDesk report resulted in an immediate increase in FTX withdrawal requests worth approximately USD 6 billion, while the FTT price fell by 80%. After failing to find funding from venture capitalists, Bankman-Fried turned to Binance.<a href="https://twitter.com/cz_binance/status/1590013613586411520?s&#61;20&amp;t&#61;UASL7y2be0ZpOhRyrjDYaA" rel="noopener noreferrer nofollow">Binance announced on November 8 that it had reached a non-binding agreement to acquire FTX&#39;s non-US business</a>. However, on <a href="https://twitter.com/binance/status/1590449161069268992?s&#61;20&amp;t&#61;UASL7y2be0ZpOhRyrjDYaA" rel="noopener noreferrer nofollow">November 9, Binance declared that the deal had been canceled</a> following due diligence.Following news that Bankman-Fried was seeking up to $8 billion in capital to bail out the exchange, the Bahamas securities regulator froze the assets of FTX Digital Markets, FTX&#39;s Bahamian subsidiary, on November 10.The California Department of Financial Protection and Innovation announced the same day that it had opened an investigation into FTX.The same day, Bankman-Fried apologized for the liquidity crisis and admitted on Twitter that FTX&#39;s non-US exchange did not have enough funds to meet customer demand.<h2 id="header-1">Government connections</h2>Following the news, the crypto community and news outlets launched an investigation into the misappropriation of FTX users&#39; funds, which resulted in the discovery of potentially the largest money laundering involving the US and Ukrainian governments.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/22ac30d937074f348c1b706e9b4d2eef.png" />As many news outlets, including <a href="https://www.foxnews.com/video/6315580276112" rel="noopener noreferrer nofollow">Fox News</a>, have suggested, the US administration provided billions of dollars to Ukraine in the form of military and humanitarian aid, which were used to partner with FTX, and later SBF donated the money to the US Democrats, becoming their second largest donor at the 2022 elections with nearly USD 37 million donated.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/c8b08c9287574e82bfce1c1d9421a1d3.png" />SBF previously donated over USD 5.5 million to Joe Biden&#39;s 2020 presidential campaign.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/77e081f1cf6e47528a5ee16c30d3fe08.png" />Aside from that, FTX.US contributed another USD 45 million to Democrats and more than USD 20 million to Republicans.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/4befffa7b48b47b89979efc27212c3b5.png" />That is an undeniably murky situation that authorities must investigate, especially given that between <a href="https://www.cnbc.com/2022/11/12/1-billion-to-2-billion-of-ftx-customer-funds-missing-report.html" rel="noopener noreferrer nofollow">USD 1 billion and USD 2 billion</a> in customer funds have vanished from the failed crypto exchange.According to Reuters and <a href="https://www.wsj.com/articles/ftx-tapped-into-customer-accounts-to-fund-risky-bets-setting-up-its-downfall-11668093732?utm_source&#61;substack&amp;amp;utm_medium&#61;email" rel="noopener noreferrer nofollow">The Wall Street Journal</a>, Bankman-Fried, now the ex-CEO of FTX, transferred $10 billion in customer funds from his crypto exchange to Alameda Research, a digital asset trading house.<h2 id="header-2">What does this mean for the cryptocurrency industry?</h2>The events that were discovered shocked the crypto community and are still being investigated. However, the impact of the revealed fraud is more profound than at first glance suggests.Bloomberg has provided the following chart to illustrate the relationship between the FTX group and other companies:<img src="https://academy-public.coinmarketcap.com/optimized-uploads/c421883894754c01ba9ff6439e09bbc7.jpeg" /><h2 id="header-3">What are the ramifications?</h2>The situation is already having a significant impact on the industry, undermining users&#39; confidence in any blockchain-related project.Following the demise of FTX, users are now concerned about the crypto.com exchange, which has resulted in a high withdrawal rate, according to <a href="https://www.wsj.com/articles/crypto-com-withdrawals-rise-after-ceo-admits-transaction-problem-11668350510" rel="noopener noreferrer nofollow">The Wall Street Journal</a>.In the aftermath of FTX&#39;s collapse, Genesis Global Capital, the lending arm of crypto investment bank Genesis Global Trading, has temporarily suspended redemptions and new loan originations.Genesis revealed that its derivatives unit had approximately $175 million in locked funds in its FTX trading account, and withdrawal requests exceeded Genesis&#39; current liquidity.Galaxy Digital (GLXY), a crypto-focused financial-services firm, also disclosed that it had <a href="https://finance.yahoo.com/news/galaxy-announces-third-quarter-2022-120000552.html" rel="noopener noreferrer nofollow">approximately $76.8 million in cash and digital assets exposed to FTX</a>.In response to the market collapse, Binance CEO CZ announced on November 14, 2022 on his Twitter account that the company is forming an industry recovery fund to assist projects that are otherwise strong but are experiencing a liquidity crisis.While waiting for more information, CZ encouraged other industry players to join this initiative.<h2 id="header-4">How can crypto users secure themselves?</h2>1. First and foremost, always DYOR. This is the first and most important rule of the cryptocurrency industry that many of us ignore. We recommend that you review the Risk Factors section of our Whitepaper once more. Keep this in mind and carefully consider each decision you make.2. Interact with the project&#39;s team. Communication is the simplest way to understand someone else. Examine how the team members respond to you. Remember that while every crypto project may face difficulties, especially when the market is down, not everyone can openly admit it and take the necessary steps to rectify the situation.3. Research the market. As previously stated, crypto is a risky field that necessitates specific knowledge and expertise. It is critical to stay current on the latest trends and developments in order to predict potential outcomes.We hope this article was informative and shed light on the current situation.Don’t forget, we are now on CoinMarketCap Community: <a href="https://coinmarketcap.com/community/profile/ndbmoney" rel="noopener noreferrer nofollow">https://coinmarketcap.com/community/profile/ndbmoney</a>Subscribe to our other social media:Telegram: <a href="https://t.me/ndbtechnology" rel="noopener noreferrer nofollow">https://t.me/ndbtechnology</a>Discord: <a href="https://discord.gg/srpgqGDuJq" rel="noopener noreferrer nofollow">https://discord.gg/srpgqGDuJq</a>Twitter: <a href="https://twitter.com/ndbmoney" rel="noopener noreferrer nofollow">https://twitter.com/ndbmoney</a>LinkedIn: <a href="https://www.linkedin.com/company/ndbmoney/" rel="noopener noreferrer nofollow">https://www.linkedin.com/company/ndbmoney/</a>Instagram: <a href="https://www.instagram.com/ndbmoney/" rel="noopener noreferrer nofollow">https://www.instagram.com/ndbmoney/</a>Facebook: <a href="https://www.facebook.com/ndbmoney" rel="noopener noreferrer nofollow">https://www.facebook.com/ndbmoney</a>Stay safe,NDB Money

The impacts of FTX collapse and how users can secure themselves from being scammed again

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