In his Gettr post on November 12, Miles Guo analyzed the fundamental reasons that led to the collapse and bankruptcy of the FTX exchange in just a few days.
First, it misappropriated customers’ funds, the liquidity chain broke, and the Ponzi scheme could not be sustained.
Second, it colluded with the Chinese Communist Party(CCP) and was bound for destruction. Miles said that the FTX has the scale and prestige similar to the Federal Reserve and the central bank in the digital currency circle. However, within a week’s time, it quickly collapsed because it involved the capital of the CCP.
The core issue is that FTX cooperated with Binance, a CCP controlled cryptocurrency exchange infamous for money laundering and misappropriating customers’ funds for profit. Eventually, the financial loophole was too big to be fixed or mended. At the critical moment, FTX was also fueled by Zhao Changpeng’s fire, completely killing its chance of survival.
In conclusion, whether there is a regulatory mechanism to prevent the misappropriation of customer funds is the red line that determines the survival of digital currencies and trading platforms. Binance with even more criminal activities will become the bullseye of the cryptocurrency regulators, laying the groundwork for its doom.