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FTX is a centralized Cryptocurrency exchange that promised easy Crypto trading and secure transactions. This project was backed by known names such as Tom Brady and Stephen Curry.
FTX was promoted all over the place. You could see ads all over YouTube, major streaming platforms, and all over the internet.
FTX promised to be one of the safest places to trade and invest in your favorite Crypto projects. When you search if FTX is safe on google this is what comes up.
Security is important for every cryptocurrency exchange, and FTX.US clearly takes this seriously. It has a custom-built hot and cold wallet for storing customer crypto funds, full external backing of all hot wallet funds, and relationships with industry-leading custodians - Source
Come to find out, FTX is not safe and a good amount of people lost a lot of money because they trusted this platform. It was used by over 1,000,000 people. A lot of people who did not know much about Crypto saw ads for this platform saying it was safe and decided to invest because they thought it was a safe and legit way to get their foot in the door of Crypto. They were wrong.
Exchanges are not safe. Always keep your Crypto in a cold wallet until you are ready to trade.
What happened to FTX
Less than a year ago FTX raised a good amount of money to reach a $32 billion valuation and just last month FTX was talking about acquisition plans of its own.
An Acquisition Plandocuments all cost, schedule, technical, business, management, and other considerations that will govern an acquisition program and is derived from the Acquisition Strategy. - Source
So what happened to FTX?
Coindesk released an article a week ago talking about FTX and its sister company Alameda Research. Apparently, a majority of Alameda Research's assets on their balance sheet were in the form of FTT which is FTXs own Crypto and other illiquid tokens. A token or asset that is illiquid means that it can not be easily sold or bought. This means that the majority of Alameda Research's assets were not as stable as people thought they were.
The Coindesk article caused a good amount of people to start questioning FTXs transparency and trust.
After this article was released the CEO of Binance released a tweet saying they were liquidating the rest of their FTX holdings.
This caused mass panic which caused an alarming amount of people to start withdrawing their holdings in FTX.
This Tuesday (11/8/2022) FTX customers started having trouble withdrawing their funds from FTX.
Remember to keep your Crypto in a cold wallet and off of exchanges. When you are ready to sell send them to an exchange. leaving your Crypto on an exchange puts your Crypto in jeopardy. No exchange is safe and something like this can happen. Crypto is still in its infancy and there are going to be a lot of changes over the years so make sure you know how to keep your Crypto safe and out of harm's way. Write down your seed phrase and put it somewhere safe. Never keep your seed phrase on your phone or computer. If you keep your seed phrases digitally then I suggest keeping them on a portable hard drive and putting it somewhere safe where only you know the whereabouts.
You can make your own cold wallet by following the instructions in the article below.