Question: FTX, founded in November 2019, was the third largest cryptocurrency exchange by volume. FTX filed for bankruptcy protection in November 2022 which left investors and

FTX, founded in November 2019, was the third largest cryptocurrency exchange by volume. FTX filed for bankruptcy protection in November 2022 which left investors and creditors facing billions of dollars in losses, and resignation of Sam Bankman-Fried as FTX's chief executive officer. A person familiar with the dealings between FTX and its competitor Binance said 'Sam Bankman-Fried had committed the "ultimate sin" by tapping into FTX's custodial assets to fund Alameda Research'.

Source: Reading 1.1 https://www.theguardian.com/technology/2022/nov/10/ftx-cryptocurrencycollapse-investigation

Reading 1.2 https://www.afr.com/companies/financial-services/asic-had-extensive-powersto-suspend-or-cancel-ftx-s-licence-20221206-p5c452

Reading 1.3 https://www.theguardian.com/technology/2022/dec/05/sam-bankman-friedtestify-congress-ftx-collapse

Required: answer following questions

a. What went wrong for FTX?

b. Provide your recommendations to avoid such scandal occurring again in the future.

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