Over 400,000 Irish panic after €32bn fall from ‘King of Crypto’ as investment tank

THE days of 14-year-olds making millions from cryptocurrency are over after ‘king of crypto’s’ $32 billion fall, experts say.

The collapse of Sam Bankman-Fried’s FTX empire and the resulting criminal investigation has sparked panic in an area where 400,000 Irish have invested.

Sam Bankman-Frieds FTX's $30.8 billion empire has collapsed

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Sam Bankman-Frieds FTX’s $30.8 billion empire has collapsedPhoto credit: Getty Images – Getty
The FTX shock has sapped investors' confidence in the crypto market

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The FTX shock has sapped investors’ confidence in the crypto marketCredit: Stefani Reynolds/AFP

Bloc founder Josh Woods told The Irish Sun: “FTX, one of the largest crypto exchanges in the world, has collapsed.

“This has caused panic, uncertainty and the loss of confidence in the crypto industry.

“I think we may have seen the end of the inferior coins and unregulated exchanges. I think only the top cryptos will survive and regulation will start.

“Gone are the days when 14-year-olds made millions, and it’s becoming a slow-moving commodity like stocks.”

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Bahamas-based Bankman-Fried – dubbed SBF – has filed for bankruptcy and faces federal investigations into how he managed FTX’s finances.

The stock market collapsed over a 10-day period earlier this month. When a report suggested solvency concerns, they tried to negotiate a bailout from rival Binance, but that quickly fell through.

FTX saw its assets frozen, its CEO resigned and it filed for bankruptcy within days.

More than a million people and businesses could be owed money and police in the Bahamas have launched a criminal investigation.

Most read in The Irish Sun

Most of the 30-year-old’s fortune came from his well-known cryptocurrency exchange FTX, a platform that allows traders to buy and sell Bitcoin, Ethereum and other popular digital currencies.

And the FTX shock has sapped investors’ confidence in the crypto market.

Daniele Servadei, CEO and co-founder of Sellix, told us: “We will see more exchanges and companies collapse in a domino effect over the next few days.

“This will most likely be due to the fact that FTX is the second largest exchange and has funded projects on several other platforms.

“This is what happens when an inexperienced team handles billions of dollars.

“Sam Bankman-Fried literally went around saying it was a Ponzi scheme. It’s crazy.”

‘IT’S CRAZY’

A cryptocurrency is a purely digital token that uses cryptography to govern how the tokens are created, how they are traded, and how secure they are.

And it doesn’t need or need a central bank or government to control or manage them.

Ten percent of Irish adults hold crypto – down from 12 percent over the past year after the market plummeted.

Around this time last year, the crypto market peaked with a bitcoin worth around €57,000 – but now the market has collapsed and a coin is worth around €15,000.

Bankman-Fried learned to trade stocks while working in New York, but turned to Bitcoin after getting bored. The California native, who appeared on the cover of Forbes magazine in October 2021, was quoted as saying, “I dabbled in crypto without knowing what it was.”

TOASTED

He built a trading company called Alameda Research, which made up to $1 million a day.

In June of this year, SBF signed the Giving Pledge, a public pledge by the world’s richest people to donate the majority of their wealth to charity.

In the past few days, he has tweeted: “Again, I’m really sorry we ended up here. Hopefully things will find a way to bounce back. Hopefully this can bring them some level of transparency, trust and governance. In the end, hopefully it can be better for customers.”

He said he was “putting all the details together” and was “shocked to see things unraveling the way they did.”

And last week he said his goal was to “increase liquidity, heal clients and start fresh.”

BIG CRISIS

He tweeted: “Maybe I’ll fail. Maybe I don’t get more for customers than what’s already there. I’ve certainly failed before. You know that all too well now.

“But I can only try. I’ve failed enough for the month. And part of me thinks I can achieve something.” However, Mr. Woods cautioned that the crypto industry is now in a major crisis.

He said: “The owner of FTX made some bad investments and used its users’ funds to recoup the losses.

“It didn’t work and eventually everyone started pulling their money out of the stock market until there was no money left.”

Bitcoin recently fell to a two-year low. He explained, “People are retiring from crypto investments – which is causing the price of bitcoin to go down.

“There are a number of reasons for this pullback, but the main ones are people needing their spare money to pay for living expenses, industry uncertainty and better investments elsewhere as we are in a bear run. “

Because of this drop in digital currency valuations, over a million people and businesses could face staggering losses.

Woods said, “Crypto has always had a volatile time. It’s a high-risk investment and nobody really knows what the future of crypto holds or if an investment will be good for the long-term.

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“On the one hand, I truly believe that blockchain technology is incredible and will always be there.

“However, until crypto is regulated, the industry will always be very volatile.”

Bloc founder Josh Woods said the tremor caused

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Bloc founder Josh Woods said the tremor caused “uncertainty” and “panic.”Photo credit: Bloc founder Josh Woods

https://www.thesun.ie/news/world-news/9742055/sam-bankman-frieds-ftx-collapse-crypto-industry-crisis/ Over 400,000 Irish panic after €32bn fall from ‘King of Crypto’ as investment tank

Fry Electronics Team

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