The bankruptcy of the cryptocurrency exchange FTX crashed crypto markets with Bitcoin falling from its psychologically important $20,000 level to $16,000 within only two days.
FTX is under investigation for raising its high venture capital valuations through writing off holdings of its own token as capital gains, while leaving only a small fraction of the token supply in the free market, making it easy to manipulate the price.
Venture capitalists take the fall of Sam Bankman-Fried’s crypto empire as a major lesson to do their due diligence on company valuations.
The SEC is rushing in to investigate the situation, after failing to anticipate the situation.
