Novogratz Claims That FTX Resembles Theranos

Galaxy Digital CEO Mike Novogratz compared the troubled FTX exchange to the controversial biotech start-up Theranos during his presentation on CNBC’s “Squawk Box” on Thursday.

We essentially have a situation that resembles Theranos, he observed. After becoming America’s youngest female billionaire, Elizabeth Holmes, the disgraced founder of Theranos, was thought to be the next Steve Jobs until she was found guilty of fraud earlier this year and lost her appeal.

Sam Bankman-Fried, the CEO of FTX, was dubbed “the new John Pierpont Morgan” after surpassing all other millennials in wealth with a $26.5 billion fortune. Based on his prior interactions with the businessman, Novogratz characterized Bankman-Fried as “thoughtful” and “charming.”

Earlier today, Reuters published an article alleging that FTX used consumer funds to support the trading company Alameda Research. According to Novogratz, Alameda made significant investments in “illiquid goods.” The bitcoin tycoon claims that while he is unsure whether FTX’s activities were unlawful, they most certainly were “feels unethical In any case, trust has been severely wounded. In markets, trust is everything.”

Novogratz claims that the current crisis is “frustrating” and that this has made him “furious.” Alameda Research, the cryptocurrency company that once dominated the industry, has started to wind down, according to a statement made earlier today by Bankman-Fried. In response to a request from law authorities, stablecoin holder Tether also froze $46 million worth of USDT held by FTX.

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