More allegations continue to surface following the collapse of one of cryptocurrency’s largest CEXs (centralized exchanges), FTX. FTX filed for bankruptcy weeks earlier after being valued at +430B in January 2022. In the wake of the FTX collapse, billions are missing with some traders having lost their entire life savings.
All of this foolery has had some serious effects on the market and traders in general. For one, the market has seen a domino effect of platforms failing that were intertwined with the exchange. Additionally, there has been renewed attention on regulating the digital asset sector from legislators.
Another major development that occurred this week was the arrest of FTX’s former CEO and founder, Sam Bankman-Fried. Bankman-Fried had been relaxing on house arrest in his Nassau, Bahamas mansion awaiting a decision by Bahaman officials. Monday, the Royal Bahamas Police Force officially placed him into custody at the request of US authorities.
US Charges Filed
The arrest followed the filing of charges by US prosecutors. The prosecutors allege a litany of charges ranging from fraud to securities violations and much more. Additionally, there are multiple agencies in the US seeking to get Bankman-Fried in front of congress to testify.
The NY Attorney General, Ryan Pinder, spoke on the arrest and pending extradition in a recent report. He stated that he expected the process to go smoothly and efficiently. He also stated that the House Financial Services Committee will hold a hearing to shed some light on how such a spectacular failure could occur.
The SEC is also after Bankman-Fried for his actions. They point to numerous violations of securities laws. They have already requested the company’s new CEO, John Ray III, to testify before the House Financial Services Committee on December 13th.
Notably, Ray III handled the Enron bankruptcy. Despite the level of failure of that incident, he said that this is by far the worst record-keeping he has ever seen in all his years of experience. The sheer lack of records is making it nearly impossible to track down the missing funds which has left traders even more enraged.
Bahamas on Board
Notably, the Bahamas, which has been known for lax financial regulations in the past, has been onboard following the US filings. The Prime Minister of the Bahamas has said publicly that they are “cooperating” with the hopes of bringing everyone associated with the collapse to accountability.
Claims no Intentional Wrong Doing
For his part, Bankman-Fried has stated that he committed no fraud. He has played the entire incident off as simply bad business management. His lack of remorse has only fueled anger from those who lost their savings in the fiasco. As such, it will be interesting to see how he acts when facing life in prison.
Government Ties Are Revealed
Another major revelation that has got the newsroom buzzing is that FTX had made major donations to both sides of the aisle. The company’s executives donated millions to a variety of causes. It’s these donations that may have sealed Bankman-Fried’s faith as there is no doubt that regulators want more insight into his activities.
Specifically, multiple executives made donations. Notably, some of the donations matched Bankman-Fried’s donations which make them even more suspicious. By some accounts, Bankman-Fried’s crew was the second biggest donor to the Democratic party.
An investigation has revealed that Nishad Singh, FTX’s director of engineering, played a vital role in this scheme. According to the report, Singh became the Director of Engineering in 2019 and in no time was already making major political contributions. The data shows that Sigh was the 34th highest donor to all federal campaigns during the mid turns.
Singh Was Vital
When broken down, Singh donated $8 million to these campaigns on top of an additional $13 million spent on the 2020 presidential campaign. He also donated another $2 million to the Senate Majority PAC in the summer. These donations were complimented by Bankman-Fried.
Bankman-Fried’s political dealing is even more troubling. He donated around $39 million to the Democratic Party for the 2022 midterms. While these donations may seem out of the ordinary, that was nothing to the $1 billion pledged towards the 2024 election.
Both Sides of the Isle
Republicans were also caught with their hands in the cookie jar as Bankman-Fried revelaed that he also made donations to their party. The main difference is he made these donations using dark methods to not alarm reporters or draw attention to his actions. Interestingly, the republican donations caim from another FTX employee, the co-CEO of FTX Digital Markets, Ryan Salame.
The report pegs another $23 million in donations by this individual to Republicans. The donation fest got so intense that FTX purchased a mansion in Washington DC to host Republican and Democrat parties on different nights. These parties were reportedly lavish affairs that highlighted the firm’s capabilities to fund campaigns.
There has been an immediate backlash towards pro-crypto representatives in government following the crash. The so-called bi-partisan Blockchain Eight has seen complaints from legislators who think they may be acting in the interst of tech firms. The Blockchain Eight includes Republicans Warren Davidson, Byron Donalds, Tom Emmer, and Ted Budd. On the other side of the aisle are Darren Soto, Josh Gottheimer, Jake Auchincloss, and Ritchie Torres
Not all In
Interestingly, not everyone decided to keep the FTX donations after the collapse. Beto O’Rourke promptly returned the $1 million donation he received from the group. Notably, he is one of the only representatives to take such actions with the majority not concerned about the origins of the funding.
The FTX bankruptcy scandal is not a good look for crypto and will have some serious short and long-term effects on the market. Already, the crash has made representatives reconsider what agency should be responsible for monitoring and regulating the crypto market.
Blockchain firms have argued that the Commodity Futures Trading Commission should handle the regulations. It’s more geared to innovative technologies and more flexible. However, there is now a strong faction of representatives calling for the SEC to regulate these assets. The SEC is more stringent and could stifle innovation
How to Avoid Future FTX Scenarios
There are a lot of crypto traders who now wish they had never participated in the FTX exchanges offerings Notably, the collapse has shed light on some of the alternative ways that traders can trade assets without risking major losses. One such sector that has seen a boost in users is the DEX (Decentralized Exchange) market.
DEXs are non-custodial exchanges that operate as pure code. They simply connect traders without requiring you to upload your holdings to a centralized group. This structure provides much more safety to users because they hold their crypto directly. Had FTX been a non-custodial exchange, users would still have their crypto as only the person holding the private keys can access funding in these networks.
Another sector that has seen growth since the FTX losses is safehaven assets. Tokens like META 1 eliminate volatility by decoupling the value of the token from the crypto market. These assets combine the stability of reserves with the convenience of crypto.
The META 1 Coin is the most advanced stablecoin in the market at this time. It leverages a basket of gold-related assets to remain stable. This structure is ideal for multiple reasons. For one, the token appreciates over time which makes it a great store of value.
Step 1 is Beat Inflation
The market is filled with fiat currency savers who are losing money by keeping their assets in the bank. Sadly, the current inflation rate far outpaces the APY paid to savings account holders on average. As such, these savers are suffering losses that could be avoided if they converted to a self-appreciating asset like META 1 Coin.
The current inflation rate is at a 40-year high due to a variety of factors. Supply chain shortages, a pandemic, bad monetary policies, and war are all creating the perfect storm that could lead the economy into a hard recession as predicted by analysts. Those in the know need to take proper actions to prevent losses and secure wealth in this scenario.
Protect Your Holdings
One of the best aspects of safehaven assets is their network protections. When you examine the META 1 Coin, there are some unique protections in place to keep the community decentralized and your assets safe. One of the first protections is the asset value mechanisms.
This system ensures that all META 1 trade for a minimum asset value. This approach is ideal because it ensures that the token doesn’t experience a pump and dump. The token accomplishes this task by cross-referencing all trades against the current asset value using an off-chain sensor called an oracle.
Keep the Ocean Free from Whales
The next protection ensures long-term decentralization in the project. One of the biggest issues faced by crypto traders today is centralization. When you have exchanges like FTX that are centralized, it creates choke points in the market. These choke points can become attack vectors for hackers seeking big windfalls.
The META 1 Coin ecosystem eliminates whales by making every trader prove they are human. The system prevents the usual suspects from conducting harmful trading practices such as pumps and dumps. By eliminating whales, the developers ensure that META 1 remains a community-led project.
Token Limits are Good
The developers have instituted a $5M token limit on traders as another way to prevent centralization. It’s never good when a single trader has enough tokens to affect the value of the rest of the community. After the LUNA crash, META 1 introduced a token limit to prevent this risk.
Put Your Savings to Work
There are a variety of ways that you can put your savings to work once inside the METANOMICs DeFi ecosystem. For one, you can leverage the network’s high-yield savings account features. The META VAULT is one of the easiest ways for new users to secure passive income. The account operates like a traditional savings account in that you secure APYs based on your deposit amounts.
Notably, the META VAULT provides a 10% APY which dwarfs the 0.03% provided by local banks. Additionally, the META VAULT is open to users across the globe. Interestingly, the network is located outside the jurisdiction of centralized regulators which enables it to provide its services to anyone, regardless of their country of origin.
Integrate Seamless Crypto Payments
One of the coolest additions to the META VAULT is the META MasterCard feature. You can spend your crypto just like fiat currency at any vendor that accepts MasterCard worldwide. The system improves usability by converting your crypto to fiat currency at the point of sale.
The process is designed to be seamless which makes it ideal for the user. You can spend your crypto rewards with ease. The vendor receives fiat currency and the process only takes seconds to complete. Best of all, the merchant has no idea you used a crypto-based system and you can now spend your crypto-like fiat all over the globe.
Trade Digital Assets Securely
You must find a safe exchange to trade your digital assets. The META Exchange is an advanced fourth gen DEX that provides access to a plethora of features from an easy-to-use interface. The META Exchange features a vibrant interactive trading window and a variety of helpful tools. Users can leverage advanced indicators to improve ROIs. Best of all, the exchange supports advanced trading features like stop-loss orders.
Stay Protected from the FTX Fall Out
Once you understand the FTX fallout can be avoided, it makes sense to go with a stable asset like META 1. These networks leverage over a decade of crypto advancements to create more useful and protected assets. Nowadays, it pays to understand how technology can protect you from market volatility and hackers alike. As such, networks like META 1 are the obvious choice for traders seeking ROIs and safety.