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FTX Bankruptcy: Are You or Your Company Impacted?

FTX Trading filed for Chapter 11 bankruptcy last Friday capping a sudden and startling downfall for one of the world’s largest cryptocurrency exchanges and founder and CEO Sam Bankman-Fried has resigned from the company as its CEO.

Admittedly, I am no “friend” of cryptocurrency exchanges for reasons I will explain under separate cover at another time. Still, some of those reasons are listed below in what I saw as “red flags” or KRI’s around FTX, and others, which hopefully will serve as lessons learned for investors et al going forward.

  • Who are their auditors as operators in this “new” digital environment?
  • Do they have updated financials by “reputable” auditors?
  • Do they have formal and effective risk frameworks?
  • Any credit ratings?
  • What do we look for/at, as lessons learned prior to investing in start-ups, new entries to markets, companies in the metaverse, cryptocurrency, and similar leaders (charismatic/differently cultured, etc.) think Elizabeth Holmes and her Theranos company?

Folks, these are my personal viewpoints from a strict risk management perspective.

I do know some Caribbean institutions did have investments in FTX, and I hope they fear well.

Stay proactive, resilient, and anticipatory out there.

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