The collapse of FTX — Is this crypto’s Lehman moment?

moneycontrol.com:

Kevin Roose (The Shift)

The crypto industry is known for dramatic twists, roller-coaster prices and fortunes that appear and disappear overnight.

But even by crypto standards, what happened this week was bonkers.

To non-crypto watchers, the news — the collapse of FTX, one of the world’s largest cryptocurrency exchanges — might sound boring or esoteric, the kind of story you’d happily scroll past on your way to reading about Elon Musk’s latest Twitter tempest.

But within the crypto world, it is already being referred to as the industry’s “Lehman moment” — a reference to the 2008 collapse of Lehman Brothers, which set off a global financial panic and made it clear to laypeople just how much trouble Wall Street was in.

Indeed, FTX’s fall — including a failed attempt to sell itself to rival crypto exchange Binance — may turn out to be the most gripping crypto narrative of the year, a “Succession”-level drama involving feuding billionaires, rumours of sabotage and high-stakes battles over the future of the industry. It’s a stunning, sudden fall from grace for one of the crypto world’s biggest celebrities. And it signals that the industry, already reeling from a brutal year of losses, may be in for even tougher times.

Making sense of this deal, though, requires knowing some of the complicated back story that got us here. Here’s a rough outline:

— There are two exchanges where a majority of cryptocurrency trading around the world happens: Binance and FTX.

— Binance, the bigger of the two exchanges, is run by Chinese-born billionaire Changpeng Zhao, who is known in crypto circles as C.Z. Binance’s operations are somewhat murky — it has no official headquarters, and it has tangled with authorities and regulators in many countries where