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FTX and the Lessons of Liquidity

The liquidity crisis that hobbled Sam Bankman-Fried’s empire was at its heart a crisis of confidence. A breakdown of trust that wasn’t unique to him or the crypto world alone. Long-Term Capital Management in 1998, Lehman Brothers in 2008. Remember them? They each in one way or another fell victim to vanishing liquidity spurred by a breakdown of trust from their counterparties and clients. Without trust, nothing functions. A hard lesson learned recently by FTX and Sam Bankman-Fried.

Nov 15, 2022


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