'I thought crypto exchanges were safe'

The lesson in FTX’s collapse

- By Paul Mazzola and Mitchell Goroch

Anthony* (a friend) called a few weeks ago, deeply worried. A deputy principal of a high school in Queensland, Australia, over the past year he spent hundreds of thousands of dollars buying cryptocurrencies, borrowing money using his home as equity. But now all his assets, valued at A$600,000, were stuck in an account

*Name has been changed. he couldn't access.

He'd bought through FTX, the world's third-biggest cryptocurrency exchange, endorsed by celebrities such as Seinfeld co-creator Larry David, basketball champions Steph Curry and Shaquille O'Neal, and tennis ace Naomi Osaka.

With FTX's spectacular collapse, he's now awaiting the outcome of the liquidation process that is likely to see him—and more than 1.2 million customers worldwide—lose everything.

“I thought these exchanges were safe,” Anthony said. He was wrong.

Not like stock exchanges

Cryptocurrency exchanges are sometimes described as being like stock exchanges—but they are very different to the likes of the London or New York stock exchanges, institutions that have weathered multiple financial crises.