"It appears that the crypto industry is having a bit of an ‘Enron’ moment,'' said Gabriella Kusz, CEO of the Global Digital Asset and Cryptocurrency Association.
First of all, yikes.
Second of all, good thing the current Hail-Mary CEO of FTX — John Ray III — is the same former Enron CEO who led the company through its bankruptcy and eventual liquidation.
And what does he have to say about FTX?
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray stated in his declaration in support of the company’s Chapter 11 bankruptcy filings.
Something definitely went wrong at FTX, but what?
And, where should crypto investors turn now that the cryptocurrency exchange has fallen so far from grace?
Let’s talk it out.
What is FTX?
FTX, launched in 2019, was one of the biggest cryptocurrency exchanges — which is a platform that enables people to trade their crypto for other assets, like other crypto coins, cash, and so on.
Founded by former CEO Sam Bankman-Fried, FTX is headquartered in the Bahamas due to offering trading options that are illegal in the U.S. Unsurprisingly, FTX was once known for throwing millions of dollars at U.S. legislators to change U.S. crypto regulations.
For a short time, FTX was so widely-used and favored that we ourselves even covered it in a few articles. If you want to read more about its former glory, you can check those out:
- Delta vs. Blockfolio vs. Kubera
- 4 Tips for Choosing the Best Cryptocurrency Portfolio Tracker
- The Best Crypto Portfolio Trackers for Diverse Investors
It’s clear that we at Kubera, just like many many others, had little idea of the disaster that was about to strike.
WTF Happened at FTX?
To cut right to the chase, FTX filed for bankruptcy around Nov. 11 of 2022. This came just days after Binance — another cryptocurrency exchange and the largest when it comes to daily trading volume — backed out of their agreement to buy FTX.
What made that decision so disastrous for FTX?
To answer that, we have to rewind to Nov. 6 of the same year.
On that day, Binance’s CEO announced the company would be selling off their FTT (the main token used on FTX) holdings “Due to recent revelations … ”
Probably CoinDesk’s Nov. 2 reporting that Bankman-Fried’s own crypto trading firm, Alameda Research, held billions in FTT — the very coin that Bankman-Fried created for FTX. While this isn’t illegal, it certainly undermined people’s views of both companies.
When Binance decided to sell its FTT holdings less than a week later, so did lots of other crypto traders. FTX tried but failed to return the $6 billion in cash.
A few days later, on Nov. 8, Binance and FTX struck a deal in which Binance would purchase FTX and thus handle the debt for them.
And then just one day later, Nov. 9, Binance dissolved the deal. It didn’t take long for them to uncover a web of regulatory missteps and mismanaged money.
That pretty much brings us back to Nov. 11, right around the bankruptcy announcement and resignation of Bankman-Fried.
Shortly after the resignation, emergency CEO John Ray III — an insolvency professional who led Enron and many other businesses through their bankruptcies — stepped in to lead the company.
In one set of bankruptcy filings, Ray described an “unprecedented” situation that included a “failure of corporate controls,” “complete absence of trustworthy financial information,” “compromised systems integrity,” “faulty regulatory oversight,” and a “concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals … ”
The impact of FTX’s implosion has rippled all the way to the United States Department of Justice and the Securities and Exchange Commission (SEC). Those agencies are looking into whether FTX mishandled customer money to support Alameda Research.
While the investigations rage on, it’s presumed that hundreds of thousands of FTX users will never get back the money they trusted the platform with. Many companies that received financial support from FTX are expected to suffer — such as BlockFi, a crypto lender that’s already had to declare bankruptcy.
And, the entire crypto market is also feeling the burn. Bitcoin (BTC) is experiencing an 80% decrease in value as of Dec. 2022 — after an all-time high just one year ago in Nov. 2021. Similarly, the popular altcoin ether (ETH) has lost over 70% of the value it held at its highest point, also in November of 2021.
Do What FTX Couldn’t — Oversee All Your Assets With Kubera
So what’s a crypto investor like you to do in the aftermath of an event like this?
First, catch your breath.
Then, learn from FTX’s mistakes.
It’s time to put your own system into place to ensure you have great oversight and insight when it comes to your portfolio.
It’s time to use Kubera to keep an eye on asset performance, progress on goals, net worth change, and more.
First of all, what’s Kubera?
Here are the key features we on the Kubera team have built out, with input from our users along the way, to make you a more smart and responsible investor.
And stay tuned, because after this section we’ll help you find a new crypto exchange if you’re still up for investing in the crypto space.
Track Crypto + All Assets From Kubera
To help keep an eye on the value of your crypto assets, NFTs, and DeFi coins/other DeFi assets; Kubera connects to crypto exchanges and wallets including Coinbase, Binance, Bitcoin, Ethereum, Metamask, BSC, Trezor, Ledger, and lots more.
For anything that doesn’t connect and update automatically, just use Kubera’s crypto tickers to manually monitor crypto holdings via your dashboard.
As the leader in tracking everything from traditional to alternative assets, Kubera is also your source for managing any other digital currencies, Fiat currency (USD and foreign), bank accounts, credit cards, stocks, ETFs, real estate, vehicles, collectible investments, web domains, and so much more.
For those assets with accounts, just log into them via Kubera and they’ll update in real-time within your dashboard. Our advanced tech means we can connect with thousands of global financial institutions, keeping your wealth information more accurate than most other personal finance platforms.
And for those assets that don’t have an account (most physical goods like jewelry, art, etc.), our easy-to-use interface means you can quickly add and update each asset as its value changes.
Kubera enables our users to view all of their many assets from just one dashboard, making it simple to see if any are underperforming or where you can invest a bit more to move toward your goals faster.
Find ROI for Assets, In Your Currency
With your assets all accurately accounted for in your Kubera dashboard, wouldn’t it be helpful to know how each is returning on your investment?
Enter our IRR for investments functionality. IRR means “internal rate of return” and is a more detailed way to look at ROI as it includes cash flow changes and time frame.
Kubera can determine the IRR for any asset as long as the price, value, and specifics regarding cash flow in and out are all accurate in your dashboard.
Plus, it displays this number in your currency of choice and alongside well-known indices and stocks. This additional context better helps investors understand asset performance, giving them the info they need when they’re making one of the most critical decisions of all — where to apply their money for the best results.
Learn more about how to find the IRR of your investments in Kubera.
Enjoy Transparent Pricing and Privacy
Unlike many other wealth management platforms, we’re all about transparency at Kubera.
Because of our reasonable fees, we’re able to avoid providing user data to third-parties that don’t need it to provide their services. In other words, with Kubera, your info won’t be used to push unwanted ads or product recommendations your way.
Our commitment to privacy flows into our obsession with bank-level security, which we apply to keep your information as safe as we can.
Interested in what Kubera has to offer?
Try One of These 7 Best FTX Alternatives for Crypto Investors
With your portfolio visible, secure, and finally easy to manage — it’s time to get you back into cryptocurrency investing (if you’re comfortable, of course).
If you haven’t stepped foot in this world before, read our beginner guide to investing in cryptocurrency.
With that, here are some top cryptocurrency exchanges and platforms that are in good standing as far as public knowledge goes at the time of this writing. This is not an endorsement, and just like with any financial content you read online, we strongly recommend doing your own research.
Like we mentioned earlier, Binance is the massive cryptocurrency exchange that was shortly embroiled in the FTX drama while they considered buying the troubled company.
Binance has a lot of trading options (margin trading, peer-to-peer trading, spot trading) and deals in over 65 types of cryptocurrencies — including Binance Coin (BNB) — in the U.S. Globally, its offerings are even wider. Its fees are on the lower side, but it can be complex for beginning users.
And though it’s really not that unheard of in the crypto space, we wanted to note that Binance has come under scrutiny for violating regulations in a few different countries.
Coinbase is a popular cryptocurrency exchange thanks to its incredibly user-friendly interface and the innovative learning program that allows users to earn crypto as they complete courses on cryptocurrency.
Coinbase users can trade in over 100 cryptocurrencies, but transaction fees for trades are on the high side.
eToro is a trading platform where investors can explore and imitate the trades of other, possibly more experienced, users. Users pay a 1% fee for crypto trading and no fees for stock, ETF, or options trading.
This trading tool operates in over 140 countries and keeps the features simple, making eToro a helpful tool for more casual investors and a slightly underpowered one for the more advanced trading pros.
Kraken is known for being one of the original Bitcoin exchanges. This exchange supports over 120 coins and enables users to spot trade at current market rates as well as cryptocurrency futures.
Kraken’s exchange fees are considered to be competitive and its interface user friendly, making it a good fit for experienced and newer investors alike.
Founded by the Winklevoss twins, who you might remember sued Mark Zuckerberg for stealing their idea for Facebook, Gemini is a crypto exchange known for its easy interface, strong security, and unique insurance-backed crypto wallet.
On the downside, trading fees on Gemini can be high, and they’re one of the many exchanges experiencing liquidity issues thanks to FTX. Withdrawals from the Gemini Earn program are halted as its lending partner Genesis Global Capital struggles to keep up with investor withdrawals in the wake of FTX’s bankruptcy announcement.
Uphold is a crypto and more trading tool with an “Anything to Anything” promise.
What that means is you can purchase assets using assets from different categories — like using cryptocurrency to buy stocks, and so on. Uphold works with over 70 cryptocurrencies — including the newer Ripple (XRP) — and multiple Fiat currencies, stocks, and precious metals.
This upstart may be lacking in advanced features and capabilities at the moment, but it’s worth keeping an eye on.
First and foremost, we have to mention that KuCoin is not licensed to operate in the U.S., so this exchange is off the market for U.S. investors.
For those who can use it, KuCoin is popular because it allows users to earn interest on crypto through staking or peer-to-peer lending. It also offers lower fees and works with an astonishing 600+ cryptocurrencies including odd ones like Dogecoin (DOGE), stablecoins like Tether (USDT), and obviously tons more.
Don’t go with KuCoin if you need any help though, as it’s also known for not-great customer support.
Get Your Crypto Ducks in a Row With Kubera
Change is scary — but unknowingly getting your assets wiped out from under you is even scarier.
While you can’t control corruption behind the scenes at financial institutions, what you can do is upgrade your own financial management system to keep a sharp eye on your portfolio, understand asset performance, and spot bad actors before they get too far.
What you can do is make the switch to Kubera. Our personal balance sheet platform is your answer to security and visibility all at once.
All it takes to get started is for you to sign up and set up your portfolio.
And you don’t have to stop working with your trusted financial advisor, wealth manager, or other pros to use Kubera. Just have them request a demo to see how Kubera’s white-label solution can enhance the client experience they provide. Once they add Kubera to their client portal, you’ll be able to take advantage of all our awesome features in no time!