HN Explorer

Ask HN: What the heck happened to FTX? (ELI5)

7 points by eaglehead ↗ HN
Alright, I just crawled from under a rock.

Reading all these articles and tweets about FTX and Binance -- and frankly I have no freaking idea what is the background.

So would any kind soul enlighten me on what's the backstory here?

PS: I think there is a should be a service that provides you a background for any given news article. You paste in the url and it gives you the "need to know before you read this story"

6 comments

[ 2.5 ms ] story [ 29.6 ms ] thread
legitster
Super oversimplification:

FTX was an exchange for Cryptos. No problems there. They also offered a coin of their own. Also, no problems.

But then they borrowed a bunch of money against the value of their coin. Fundamentally not good, because it means they now owe customers more money than the customers put in.

There was also a trading house that they ran on their own exchange, a competitor who might have triggered the collapse as a prank (Binance), and an over exuberant owner who always seemed to be above this sort of mess.