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In the world of crypto we have seen some crypto projects become successful and some hit the ground
The are several crypto projects that good examples of bad crisis management ,
below are some few examples failed crypto projects
One coin, Dogecoin, Paycoin, bitconnect, ftx, MT Gox etc.
Lets focus on FTX
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FTX was a global cryptocurrency exchange platforms for buying and selling cryptocurrencies. As more people invested in cryptocurrencies, they turned to these platforms because they provided a digital wallet to store cryptocurrencies directly in a personal account.
*****The downfall of FTX*****
In November 2022, FTX's collapse lasted 10 days, starting on Nov. 2 and ending on Nov. 12. It began with the CoinDesk article and the leaked balance sheet. Binance initially announced it would sell all its FTX tokens because of the mishandled and blurred funds. This caused the value of FTX to dropped significantly prompting customers to withdraw money from their accounts,
On November 8th FTX customers were unable to take money or withdraw money from the platform because that Option was taken off online and people could no longer access their money
FTX was unable to pay the 8 million gap it filed for bankruptcy . FTX crashed mainly due to mismanagement of funds, lack of liquidity and large volume of withdrawals and this is a clear bad crisis management, then binance announced it would buy FTX to prevent a larger market crash but baled out when more news of mishandled customer funds came up
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*****Criminal charges*****
Bank fried was arrested on December 12 2022 for multiple fraud charges with FTX and was later released from custody with a 250 million bond
Also FTX investors filed a class action against FTX and its celebrity endorsers on November 15 2022 claiming FTX used false representation and deceptive conduct and also using a ponzi scheme to misuse funds
*****FTX debtors report*****
On April 9 2023 FTX debtors released their first report highlighting the failures of FTX groups management team before bankruptcy ,FTX lacked appropriate management governance and organizational structure,” the report stated. In addition, FTX lacked accounting and financial controls, no formalities for intercompany transactions, allowing liabilities and assets to transfer between insiders and FTX Group entities without any documentation or checks and balances.
after the collapse of FTX other crypto projects have failed .
Before investing in a crypto project it is better to do a research even if it is known or reputable coin
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