How Binance Found a Cryptocurrency Exchange: A Story About David and the FTX Life after a Bankruptcy

At the end of the ad, David learns about FTX, “a safe and easy way to get into crypto.” David stated, “I don’t think so.” And I’m never wrong about this stuff — never.”

This week, it became clear that FTX was on the brink of collapse. It joined the list of other bankruptcies such as Mt Gox, Celsius, and Three Arrows Capital. The troubled exchange was briefly handed a lifeline on Tuesday when Changpeng Zhao, CEO of Binance (who goes by the name CZ), announced on Twitter that a rescue deal had been reached. But less than 48 hours later, Binance backed out, citing the results of corporate due diligence and news reports of mishandling of customer funds at FTX.

The company said FTX was essentially beyond saving and then almost immediately backpedaled after they said that they would explore an FTX rescue.

Despite its reputation as a dependable, low-risk investment portal, FTX’s business appears to have been built on a complex, extremely risky kind of leveraged trading.

Samuel, who asked to be referred to only by first name to preserve his anonymity, says he lives somewhere in Southeast Asia and is currently between jobs, which means money is tight. The cryptocurrency in his FTX account was his nest egg.

Samuel has a large portion of his portfolio made up of a digital coin called XRP which has been depressed by an ongoing lawsuit between its issuer, Ripple Labs, and the US Securities and Exchange Commission. Samuel was keeping his fingers crossed that a favorable ruling might send the price of XRP skyward, as there had been signs of a close legal battle. But now, with his tokens locked up in FTX, he won’t be able to reap the rewards for his patience. He says that he could see the finish line, but that the latest drama has him hanging by the balls. It is so much hardship.

There are many FTX customers with stories like this one. One FTX trader, who asked to remain anonymous, was in the US when they first heard of trouble at the exchange, which meant it was not possible to immediately withdraw their funds (FTX International, not to be confused with FTX US, is unavailable in the country.) The withdrawal password for the FTX trader was reset because of security reasons, when they used a VPNs service to get around the restrictions. By that time, it was already too late.