Fall of FTX creates conspiracy theories about Ukraine

A viral conspiracy theory claims that the recently collapsed cryptocurrency exchange company FTX was being used by Ukraine to launder money for the benefit of the ruling Democratic Party in America. However, the claims are false.

Founded in 2019, Bahamas-based cryptocurrency exchange FTX (an anagram of Future Exchange) made its owners, U.S. citizen Sam Bankman-Fried and Chinese-born Zixiao “Gary” Wang almost overnight millionaires.

Raising billions of dollars in investments, FTX was part of a wider, complex group of companies later solely owned by Bankman-Fried, and soon came under scrutiny over its lack of transparency.

In August 2022, the Federal Deposit Insurance Corporation (FDIC) published a cease-and-desist letter after FTX President Brett Harrison falsely alluded to FTX having FDIC insurance.

Undeterred, FTX continued to grow, becoming one of the world’s largest cryptocurrency exchanges, enticing millions of clients to use its services.

One such client was Aid for Ukraine, a popular charity organisation established to collect donations to help Ukraine defend itself against the ongoing Russian invasion. From early March, Aid for Ukraine used FTX to convert cryptocurrency donations into Ukrainian currency. However, the partnership – one of millions FTX was engaged in – ended the following month.

In October, FTX was placed under investigation in Texas for selling unregistered securities.

Embroiled in scandal, the following month, Bankman-Fried’s fortune dramatically plummeted from $16bn to almost zero, with FTX filing for bankruptcy protection in the U.S. on Nov. 11.

The collapse was due in part to a token called FTT – essentially a way for members of the public to buy shares in the company, which FTX promised to buy back later using a portion of its profits. However, leaked documents suggested that the group’s hedge fund was using money from the purchasing of FTT tokens to make risky loans.

After the company collapsed, it was revealed that FTX, not having the ability to accept wire…

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