Two years ago, FTX was one of the largest cryptocurrency trading platforms in the world. Its beginning was promising, but behind the scenes, a very big game was being played on the market.$BNB
The story:
FTX would sometimes open huge positions on cryptocurrencies, for example, a bullish position 🟢, and start buying large quantities of a certain coin. As a result of the large purchase, the price would automatically rise because the market reacted to the volume of demand. After the price rises and attracts other investors, FTX opens a selling position 🟥 and sells the quantity it previously bought at a higher price, thus making a significant profit at the expense of other investors who entered at the wrong moment.
Revealing manipulation:
The risks revealed themselves when CZ (Changpeng Zhao), the founder of Binance, noticed discrepancies in the market and the volume of FTX trades, and stated that the platform was manipulating the market, which helped expose the crisis before the complete collapse.
Result:
Investors lost their money 💸
The platform collapsed suddenly due to a lack of liquidity and internal manipulation.
Its founder was accused of fraud and money laundering.
The lesson for investors today:
Even if the platform is big like Binance or others, you must be aware of the volume of trades and their impact on the market.
Diversify your investments.
Monitor transparency and financial data.
Do not rely entirely on any platform.
💡 The digital market is full of opportunities, but it is also full of hidden risks. Learn from the story of FTX before any investment step.