With the holiday season upon us, the rerun of the 1946 holiday film classic, “It’s A Wonderful Life” will be shown everywhere and just like one of the many iconic scenes in the iconic film, there has been a “run on the bank” – only it is not the Bailey Building & Loan, but Mercedes Formula One sponsor, FTX cryptocurrency, which has suffered a “run” on their money which has put the company on the brink of collapse.
FTX – at one time, the second-largest cryptocurrency exchange in the world – is now on the verge of collapse after
fellow cryptocurrency company Binance refused to save it by purchasing it and initial investor venture capital firm Sequoia announced it had written down its investment in FTX to $0.
FTX’s sudden collapse in value began when Alameda Research, a hedge fund reportedly validating FTX worthiness was actually consisting of a token [FTT] that was issued by FTX and had no value other than that guaranteed by the exchange.
That sparked Binance – the world’s largest cryptocurrency exchange – to sell their stake in FTT, then decline to purchase FTX, which has now left FTX with no value and on the edge of the financial cliff.