Sam Bankman-Fried, the CEO of cryptocurrency exchange FTX, recently admitted there was more that could have been done to protect its customers’ money following widespread reports of liquidation on the platform.
The incident took place in mid-August, when FTX users experienced massive liquidations after the price of Bitcoin temporarily dropped to as low as $10,996. While some customers had their funds returned shortly after the event, many were left facing significant losses.
In response, Bankman-Fried admitted that FTX should have done more to protect customer funds during the event. He said that the company had not anticipated such a large move in the price of Bitcoin, and that it was actively working to protect customers from similar events in the future.
To this end, FTX quickly increased the minimum collateral requirement for traders from 150% to 175%, and has also implemented a two-stage liquidation process which should limit losses in the event of a large price move. In addition, Bankman-Fried has promised to pay back any customers who had their funds disproportionally liquidated during the August event.
Overall, Bankman-Fried’s admission shows that he is taking steps to improve the security of FTX’s customers’ funds, and that he is willing to take responsibility when things go wrong. This may well help to restore confidence in the platform, and could bode well for its future success.