There are no signs of AMC Entertainment signing an agreement to the AMC FTX Token listed on the FTX crypto exchange.
When viewing the terms of service and terms of the tokenized stock product (AMC), users are prompted to error pages.
The AMC FTX token is also showing as an ‘invalid symbol’ on the platform with no live chart as we’ve seen in the past.
The tokenized stock was trading at $4 (USD) but has lost all its value since the company collapsed and filed for bankruptcy.
Retail investors are digging deep and are concluding that the crypto exchange could have potentially been using these tokens to launder money.
The FTX scandal only goes deeper into the rabbit hole.
Let’s discuss what happened.
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FTX Scandal: What Went Wrong?
Cryptocurrency exchange FTX filed for Chapter 11 bankruptcy on November 11, 2022, after the company’s valuation dropped from $32 billion to bankruptcy in only a matter of days.
The collapse of the cryptocurrency exchange dragged founder and CEO Sam Bankman-Fried’s $16 billion net worth to near-zero.
FTX was responsible for dropping the crypto industry below $1 trillion.
On November 16, a class-action lawsuit was filed in a Florida federal court, alleging that Sam Bankman-Fried created a fraudulent cryptocurrency scheme designed to take advantage of unsophisticated investors from across the country.
Which celebrities were affected by FTX?
Celebrities named in the lawsuit include Steph Curry, Shaquille O’Neal, Shohei Ohtani, Naomi Osaka, Larry David, and Kevin O’Leary who allegedly helped Bankman-Fried promote the exchange.
FTX became one of the largest crypto exchanges in just three years with a valuation of $32 billion.
Bankman-Fried used aggressive marketing, including a Super Bowl ad campaign, and the purchase of naming rights to the home of the Miami Heat basketball team.
He became known for his political lobbying and donations as well as for working to support the cryptocurrency industry more broadly.
As values plunged in early 2022, he facilitated deals totaling about $1 billion to bail out cryptocurrency companies struggling as a result of the declines in token prices.
Conflict of Interest Created Mass Selloff in FTX
FTX’s collapse took place over a 10-day period in Nov. 2022.
The catalyst for the crisis was a Nov. 2 scoop by CoinDesk that revealed that Alameda Research, the quant trading firm also run by Bankman-Fried, held a position worth $5 billion in FTT, the native token of FTX.
The report revealed that Alameda’s investment foundation was also in FTT, the token that its sister company had invented, not a fiat currency or other cryptocurrency.
That prompted concern across the cryptocurrency industry regarding SBF’s companies’ undisclosed leverage and possession of assets.
Here’s when things really started going downhill for FTX.
Binance, the world’s biggest crypto exchange, announced on Nov. 6 that it would sell its entire position in FTT tokens, roughly 23 million FTT tokens worth about $529 million.
Binance CEO Changpeng “CZ” Zhao said the decision to liquidate the exchange’s FTT position was based on risk management, following the collapse of the Terra (LUNA) crypto token earlier in 2022.
By the next day, FTX was experiencing a liquidity crisis.
Bankman-Fried attempted to reassure FTX investors that its assets were stable, but customers demanded withdrawals worth $6 billion in the days immediately following the CoinDesk report.
Bankman-Fried searched for additional money from venture capitalists before turning to Binance.
The value of FTT fell by 80% in two days.
Sources: Investopedia.
FTX: A Pyramid Scheme Created from Mass Marketing?
Within hours of filing for bankruptcy, FTX was hacked.
The exchange noted that ‘unauthorized transactions’ close to half a billion dollars in total were stollen from several wallets during a period of days.
Since the incident, regulators of the Bahamas have frozen FTX’s assets, and the company has strongly advised against customer deposits.
What’s occurred with FTX is an ongoing investigation and lawsuit against now ex-CEO Sam Bankman-Fried.
So, was FTX just a scam to laundering money through the use of unauthorized stock tokens and covered by the hack that occurred?
Or was this just a poorly managed incident that occurred without motive?
I’d love to hear your thoughts on this.
Leave a comment down below.
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