In early November, Iqbal Kassam, a Vancouver-based 30-year-old, had decided to take a couple of days off. His marketing business was running smoothly and the crypto markets, which he had been actively following and investing in on the side, seemed to have cooled, requiring less of his day-to-day attention. So he and his wife decided to go on a quick vacation and visit his in-laws.
Right around that time, speculation online started percolating about FTX, the second-largest crypto exchange in the world, being insolvent. “Those were the days it looked like things were getting out of hand,” Kassam says, but he figured he was probably fine given that most of his holdings weren’t in FTT, FTX’s crypto token, or in other tokens; he had sold most of his crypto earlier in the year and was instead holding dollars on the platform.
While Kassam was on vacation, the FTX revelations escalated, fast: crypto trade publication Coindesk along with crypto researcher James Block found that a significant chunk of the holdings belonging to Alameda Research, a crypto trading firm run by FTX head Sam Bankman-Fried (better known as SBF), were in FTT. The revelation that one firm’s value relied primarily on the printed-from-thin-air financial product devised by its sister company set off alarms in the world of finance. Days later, investors were further spooked: On November 6, Changpeng Zhao, the CEO of Binance, the world’s largest crypto exchange, announced that his company would be selling off all of its holdings in FTT, due to “revelations” about the financial health of parent company FTX. Within a day, the price of FTT plummeted from just over $22 all the way down to under $4, as FTX users started pulling their money from the trading platform en masse. When Kassam returned from vacation and caught up, FTX had stopped letting…
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