Add news
March 2010April 2010May 2010June 2010July 2010
August 2010
September 2010October 2010
November 2010
December 2010
January 2011
February 2011March 2011April 2011May 2011June 2011July 2011August 2011September 2011October 2011November 2011December 2011January 2012February 2012March 2012April 2012May 2012June 2012July 2012August 2012September 2012October 2012November 2012December 2012January 2013February 2013March 2013April 2013May 2013June 2013July 2013August 2013September 2013October 2013November 2013December 2013January 2014February 2014March 2014April 2014May 2014June 2014July 2014August 2014September 2014October 2014November 2014December 2014January 2015February 2015March 2015April 2015May 2015June 2015July 2015August 2015September 2015October 2015November 2015December 2015January 2016February 2016March 2016April 2016May 2016June 2016July 2016August 2016September 2016October 2016November 2016December 2016January 2017February 2017March 2017April 2017May 2017June 2017July 2017August 2017September 2017October 2017November 2017December 2017January 2018February 2018March 2018April 2018May 2018June 2018July 2018August 2018September 2018October 2018November 2018December 2018January 2019February 2019March 2019April 2019May 2019June 2019July 2019August 2019September 2019October 2019November 2019December 2019January 2020February 2020March 2020April 2020May 2020June 2020July 2020August 2020September 2020October 2020November 2020December 2020January 2021February 2021March 2021April 2021May 2021June 2021July 2021August 2021September 2021October 2021November 2021December 2021January 2022February 2022March 2022April 2022May 2022June 2022July 2022August 2022September 2022October 2022November 2022
News Every Day |

Amid downfall of crypto exchange FTX, an absence of regulation and rescuers

FTX, one of the world’s largest cryptocurrency exchanges, filed for Chapter 11 bankruptcy last week, and investigators are now looking into what went wrong. The exchange has been accused of using customers’ funds for investments without permission, according to The Wall Street Journal

“Marketplace” host Kai Ryssdal speaks with Liz Hoffman, business and finance editor at Semafor, about the role of FTX and regulation of the crypto market. The following is an edited transcript of their conversation. 

Kai Ryssdal: I want to start really nuts and bolts here because this is a tremendously complicated story. What exactly is a cryptocurrency exchange?

Liz Hoffman: You can think of it like the New York Stock Exchange, but instead of trading shares of Apple or Microsoft, you trade cryptocurrencies — this sort of funny-money coins that have, you know, become all the rage in the last five or 10 years.

Ryssdal: They have indeed. OK, so what is our — I guess, what was — right, because we have to ask in the past tense now — what was FTX’s place in that exchange ecosystem?

Hoffman: It was one of the largest. I mean, plainly put, it was a major player. It’s where a lot of people traded their crypto, bought and sold it and, importantly, kept it.

Ryssdal: And it has seemingly vaporized in something less than, like, 10 days. What happened?

Hoffman: At a very fundamental level, they were supposed to hold on to people’s money and give it back to them when they asked for it. And they failed to do that. So you can think of it as just a classic run on the bank — like, setting aside all of the weirdness around cryptocurrencies and it was just a run on the bank. They didn’t have the money when people wanted it back, and they filed for bankruptcy on Friday.

Ryssdal: And the company and its very high-profile founder, Sam Bankman-Fried, is under investigation.

Hoffman: Yes. You know, regulators and, and prosecutors want to know exactly what happened here. In the same way that you’ll remember when Lehman Brothers went under and AIG nearly failed. I mean, it was a real reckoning for the financial system and raised some very fair questions about who was asleep at the switch.

Ryssdal: So do you think this is the Lehman moment? Do you think this is the reckoning for crypto now?

Hoffman: I do, Kai. You know, for all we’ve been talking about crypto for the last five or 10 years, it’s still really in its early days, maybe it’s sort of like rebellious adolescence. And, you know, when in every sort of market, every new market that pops up goes through this period. And there’s a lot of knucklehead stuff that gets sort of washed out. And there’s someone who comes along and professionalizes it. And that was supposed to be Sam Bankman-Fried, who, I should note, is an investor in Semafor. And without him, there is not an obvious contender for that role. And then the other thing is that all financial systems are just confidence games. Right? The reason that banks don’t fail is because people think their money will be there when they go get it. And this is a real confidence reset for crypto.

Ryssdal: There will be many people out there screaming, “Where were the regulators? Why isn’t somebody keeping an eye on crypto?” Because for all the knucklehead stuff that’s happening, there are millions and billions of dollars that have just disappeared.

Hoffman: Yes. This was a little bit of a regulatory jump ball. Because it’s not quite a security, like the Securities and Exchange Commission. It’s not a bank like the [Federal Reserve] oversees. The other thing is, there’s a real knowledge gap between the people in charge in Washington and the, like, “Move fast and break things” technology people. And that gap was especially wide in crypto, and they did not get there in time.

Ryssdal: Do you think this hastens the push for some kind of substantive regulation?

Hoffman: Absolutely, absolutely. You don’t really have to worry too much about the weirdness of cryptocurrencies. It was an exchange, and the New York Stock Exchange has to keep a certain amount of capital and they’re not allowed to take the other side of trades. I mean, just very basic nuts and bolts Wall Street regulation would have gone very far here.

Ryssdal: All right. So look, if I’m just a person in this economy, trying to grind it out, and I’m, you know, reading the headlines and I see this story, why does this event matter to me?

Hoffman: I should say, at the high level, I’m not totally sure that it does. If you’ve just been living your life at your bank, you’re probably fine. You know, crypto — by definition — had this, like, real disdain for the establishment. And so they largely lived outside of it. FTX is not all that plugged in to most of the traditional financial system. That said, these things can have really weird knock-on effects, and you just take a long time to figure out where they are. And then look, if you found some value in cryptocurrency, I think there’s some interesting stuff. There are ways to save people money to reduce costs, for example, transferring money. And, you know, if you’ve tried to get a mortgage, I mean, God, it’s a mess. This really sets that back probably by a decade.

Ryssdal: Last thing and then I’ll let you go. There is no bailout a-comin’ right? There’s no Federal Reserve that backstops banks, right, in the land of crypto?

Hoffman: Absolutely not. And you know, that’s something that people who are customers of FTX and a lot of these crypto companies that have gone bankrupt are realizing — that they are the creditors, right? They are. No one is coming to their rescue here, like you said. Your bank deposits are insured by the FDIC, your brokerage account is insured by a similar kind of mutualized backstop there. There is nothing here. And I think FTX’s customers are unlikely to recover much, if anything.









Read also

CDPR Says Cyberpunk: Edgerunners Season 2 Still Isn’t Happening, But Might Make Other Shows

Why a possible railroad strike has Central Texas truckers worried

Echoes of Tiananmen Square: World Looks Away as Chinese Communist Regime Sends in Tanks to Xuzhou to Quash Democracy Protests (VIDEO)


News, articles, comments, with a minute-by-minute update, now on Today24.pro

News Every Day

Billionaire investor Howard Marks touts a bargain boom as interest-rate fears grip markets - and predicts a surge in companies going bankrupt

Today24.pro — latest news 24/7. You can add your news instantly now — here


News Every Day

‘How many Uber drivers does it take to pick up a disabled person?’: Disabled person says 3 Uber drivers canceled on them because of their service dog



Sports today


Новости тенниса
ATP

Кукушкин взлетел вверх в рейтинге ATP



Спорт в России и мире
Москва

Кубок Москвы по джампингу прошёл в ТРЦ «Нора»


Загрузка...

All sports news today




Загрузка...

Sports in Russia today

Москва

МБА одержала волевую победу над «Самарой» в Единой лиге ВТБ


Новости России

Game News

Give your Steam Deck a sweet docking station to live in for 24% off this Cyber Monday


Russian.city


Москва

Онкологи подмосковной Балашихи спасли пациента весом 140 кг


Губернаторы России
Арцах

Азербайджан должен помнить о 5 упоминаниях «Нагорный Карабах» в трехстороннем заявлении, подписанном Алиевым: Эдмон Марукян


Отказ Азербайджана предоставить Нагорному Карабаху (Арцаху) статус дает нам сильный юридический и политический инструментарий – бывший глава МИД Армении Осканян

Заботливые политики помогут предотвратить эпидемии и войны?! Рекомендации проекта Служба общей информационной безопасности, Анатолий Голод

1,5 млн рублей смогут получат авторы проектов по адаптации детей и борьбе с буллингом

Авиарейсы в Архангельск с 1 мая будут приниматься на запасном аэропорте


Певица Татьяна Котова: "Я долгие годы боролась с фобией..."

Карди Би нашла в сериале «Корона» общую для всех женщин проблему

Игорь Рыбаков: «Продажи «Москвича» стоит стимулировать бесплатными парковками»

Александр Буйнов заключил сделку с внуком-кадетом


Пресс-служба ATP опубликовала подборку лучших матчей сезона-2022 на турнирах ATP

Путинцева подобралась к топ-50 рейтинга WTA

Белу-Оризонти. Рафаэль Надаль одолел Каспера Рууда в выставочной встрече, Бруно Соареш провёл прощальный парный матч

Канада впервые выиграла "Кубок Дэвиса", в федерации тенниса Польши скандал. Главные события минувшей недели



SUNLIGHT расширил сеть до 500 магазинов

Чем сезон холодов опасен для женского здоровья

Ульяна Ульянова из Ульяновска шла к короне «Королевы России» в костюме Ксении Собчак

Баку хочет закрыть Лачинский коридор - омбудсмен Нагорного Карабаха (Арцаха)


Лукашенко собрался обсудить с Путиным бюрократию, тормозящую сотрудничество с Россией

Ульяна Ульянова из Ульяновска шла к короне «Королевы России» в костюме Ксении Собчак

Титул «Мисс Офис – 2022» и 3 000 000 рублей уехали в Петропавловск-Камчатский

Нагорный Карабах (Арцах) склонен к продолжению переговорного процесса под эгидой Минской группы ОБСЕ. Спикер Национального Собрания НКР


Силуанов: власти РФ контролируют уровень инфляции в стране

Длина снесенных в столице незаконных ограждений сопоставима с протяженностью Бульварного кольца

Россиянам рассказали, какие даты наиболее выгодны для путешествий на новогодние праздники

Югоосетинский КГБ «односторонне обустраивает» де-факто границу с Грузией



Путин в России и мире







Персональные новости
Russian.city

Александр Буйнов

Александр Буйнов заключил сделку с внуком-кадетом



News Every Day

Crypto Lender Matrixport Raises Valuation to $1.5B Despite FTX Collapse




Friends of Today24


Загрузка...
Музыкальные новости

Персональные новости
Moscow.media