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Ripple CTO Names Three Things That Went Horribly Wrong with FTX

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Fri, 9/12/2022 - 8:54
Ripple CTO Names Three Things That Went Horribly Wrong with FTX
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David Schwartz, chief technology officer at distributed ledger company Ripple, has singled out three main things that led to the collapse of the FTX crypto empire.

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First of all, he says that Alameda Research, a trading firm affiliated with FTX, used FTX customers' funds.

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Second, FTX's customer deposits, which were supposed to be used by Alameda, became commingled with those assets that were used for making risky bets. FTX ex-CEO Sam Bankman-Fried now claims that the assets were mixed up "unknowingly," denying committing fraud.

Finally, he adds that Alameda did not manage risks at all even though the firm was supposed to implement risk-managed, nearly delta-neutral strategies.

"How can anyone not be appalled at this incompetence/fraud?" Schwartz asked.

Schwartz is "mystified" by O'Leary's stance on FTX

Schwartz also claims that he is puzzled by Kevin O'Leary's position on the FTX exchange. He claims that his recent statements could be explained by "willful blindness."

During a recent interview with CNBC, O'Leary revealed that he had lost the $15 million FTX that he was paid for being the company's spokesperson.

Despite taking a hit due to his association with Bankman-Fried, O'Leary recently tweeted that he would still have the disgraced entrepreneur on his team again, adding that "failure is often the best teacher." As expected, the comment ruffled the feathers of many cryptocurrency community members who have turned against Bankman-Fried.

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