: Most of the Funds Used to Purchase FTX’s Blockfolio Stake Came from FTT: Bloomberg
• The cryptocurrency exchange FTX purchased a majority stake in trading platform Blockfolio in 2020 for 84 million dollars, 94% of which was paid in FTX’s own token, FTT.
• FTT was at the center of the downfall of FTX after CoinDesk revealed that sister firm Alameda Research’s balance sheet was full of the token, exposing the company’s financial instability.
• Sam Bankman-Fried, former CEO of FTX, now faces criminal charges in the United States for wire fraud, conspiracy to commit money laundering and violating campaign finance laws.
In 2020, cryptocurrency exchange FTX made a big move in the trading market by purchasing a majority stake in trading platform Blockfolio for 84 million dollars. According to financial documents, 94% of the amount paid was in FTX’s own token – FTT. With this deal, FTX was able to gain a 52% stake in the trading platform.
However, this purchase quickly became overshadowed by the downfall of FTX. After CoinDesk revealed that sister firm Alameda Research’s balance sheet was full of the token, it exposed the company’s financial instability. This led to the collapse of Sam Bankman-Fried’s crypto empire and the disgraced former CEO now faces criminal charges in the United States, including wire fraud, conspiracy to commit money laundering and violating campaign finance laws.
In addition, the U.S. Securities and Exchange Commission (SEC) has classified FTT as a security. This means that investors in the token will be subject to the same laws and regulations as other securities, such as stocks, bonds and derivatives.
FTX did not immediately respond to CoinDesk’s request for further comment. This is certainly a major setback for the company, as it will have to face the consequences of its actions and deal with any legal ramifications. It remains to be seen how FTX will move forward from this and if it will be able to regain its standing in the trading market.