Ftx's Downfall and Binance's Consolidation : The Fragility of Centralized Digital Finance

This investigation analyses the factors leading to the collapse of the FTX digital currency exchange. We identify the collapse of Terra-Luna as the trigger event causing a significant decrease in liquidity to the crypto exchange which heavily relied on leveraging and misusing its native token, FTT. Additionally, we analyze the interdependencies of 199 cryptocurrencies at hourly intervals and find that the collapse was accelerated by Binance tweets, originating a systemic reaction in the market. Finally, we highlight the growing trend of centralization within the crypto space and emphasize the importance of genuinely decentralized finance for a transparent, future digital economy