Last week, a series of events stemming from a CoinDesk article led to the bankruptcy of one of the biggest crypto exchanges in the world, FTX.

Following the popularization of a leaked document showing the assets of Alameda Research, a Sam Bankman-Fried (SBF) company, investors in FTX find themselves on the ropes. Alameda, it turns out, holds a vast majority of its assets in FTT, FTX’s native token. This discovery spooks FTX holders and Alameda investors, triggering a flurry of panic selling that annihilates FTT’s price. 

FTX is left without a solution. Soon after, SBF declares bankruptcy and issues a public apology on Twitter. The apology does little to soften the blow, particularly after more information on FTX’s activities becomes publicly available. 

In the days after the CoinDesk article, it was uncovered that SBF used FTX customer funds for trading via Alameda Research and took out a $1 billion loan from Alameda Research, his own company.

Due to wide-scale negligence and fraud, SBF and his team have lost investors and customers millions of dollars. The SBF case also shows the frailty of certain projects within the crypto space; FTX was valued at $32 billion at its peak. 

It took one leak of its balance sheet to bring it to $0.

FiscalNote’s Crypto-Policy-Tracking Solutions

The more concerning part of this story is its unoriginality. 

Crypto onlookers have seen several high-profile implosions this year. Three Arrows Capital, Celsius, Voyager Digital, Luna, BlockFi and Genesis have all collapsed in 2022, sending ripples of danger throughout the crypto world. FTX’s story, while perhaps slightly more dramatic, embodies the same fault as the rest: An inability to appropriately manage risk and responsibly manage assets and liabilities. 

Given the past sequence of events, it’s clear that staunch blockchain supporters need help staying safe while this technology climbs out of its infancy stage. As an agency specialized in collecting data on the regulatory processes in the U.S. and abroad, FiscalNote Holdings Inc. (NYSE:NOTE) may provide investors with the needed safety coverage. 

FiscalNote’s crypto-policy-tracking solutions allow investors to: 

• Quickly monitor thousands of U.S. local and federal bills across 12,000 local government entities and all 50 states.
• Access award-winning non-partisan news. 
• Consume weekly newsletters on Congress and Federal agencies’ latest dealings with cryptocurrency-related issues. 
• Monitor changes in cryptocurrency legislation across Europe and the world. 

FiscalNote’s crypto-policy-tracking solutions are trusted by Lenovo, UBS and Allianz. To the crypto optimist, they represent a safeguard against the industry’s unforgiving fraudsters. 

For more on how FiscalNote can help keep you safe, click here. 

Featured Photo by Sajad Nori on Unsplash

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