What Is a Crypto Exchange Token and How Did It Help Blow up FTX?

The FTT exchange token played a key role in the downfall of the crypto exchange FTX and affiliated trading firm Alameda Research. It was the use of FTT to inflate both entities’ balance sheets, reported by CoinDesk’s Ian Allison on Nov. 2, that raised the first doubts that sparked the collapse.

FTT may have been core to another aspect of the FTX fraud, serving as notional (but actually worthless) “collateral” for loans of customer funds made by FTX to bail out Alameda.

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