FTX Collapse Similar to Enron Than Lehman Brother- Lawrence Summers

• Lehman Brothers was an American financial firm whose bankruptcy led to recession.
• Enron’s collapse is also in the category of one of the biggest collapses in the market.  

Lawrence Summers is a well-known American economist who served as the 71st United States treasury Secretary from 1999 to 2001.      

Larry said comparing the FTX Exchange collapse with the Lehman Brothers incident is inappropriate. Moreover, FTX’s Bankruptcy can be compared with the Enron incident of 2001.  

While talking to Bloomberg, Larry stated, “he wanted to compare the FTX meltdown with the Enron Scandal.”    

Enron Corporation was a major American company known for energy, commodities and services; it was established in 1985. Enron has held the title of “America’s most Innovative Company” for six continuous years.  

Enron was operating its business so well that the all-time high of its stock was worth $90.56, and after it declared bankruptcy, the stock price came down to $0.26.  

The Enron Scandal was such a huge fraud/scam that it troubled its users and investors and is believed to have lost $75 billion in just a few days.

Enron filed for bankruptcy on December 2, 2001, and following the bankruptcy, the NYSE suspended Enron from the market on January 15, 2002.  

The FTX crash and the Enron scandal are similar in that the FTX native token reached an all-time high of $78, and when it filed for bankruptcy, the token price dropped to $1.25.

FTX’s former Chief Executive Officer filed bankruptcy and informed about the same on Twitter, and after the filing, Sam resigned from his post of CEO.  

Lehman Brothers collapse was one of the biggest financial crashes in the United States, and according to information, more than 25k employees lost their jobs.    

The bankruptcy was so massive that the 2008 recession came into U.S history when it was revealed that losses were around $600 million. 

According to the news source, John Ray III occupied the vacant position of Chief Executive Officer of FTX Exchange and held the responsibility of Chief Restructuring Officer.   

Although John’s appointment in FTX was not good, as Security and Exchange Commission said John was involved in insider trading and traded stocks of three companies while working as the director in those firms. 

According to the official letter of FINRA, the Financial Industry Regulatory Authority will inspect and analyse how firms operate their retail communication from July 1 till the end of September. 

Until now the decision to examine firms’ communication related to crypto products came after the collapse of the FTX exchange.

The collapse of the FTX exchange has troubled users and investors severely, and approximately 1 billion users lost their savings. Many of the capital investors of FTX have lost millions of dollars in just 24 hours.   

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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