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WEKU
WEKU
David Gura

FTX made a cryptocurrency that brought in millions. Then it brought down the company

FTX FTT Sam Bankman-Fried Cryptocurrency Eswar Prasad Binance Zhao Alameda Research
Sam Bankman-Fried, the now-former CEO of FTX, encouraged the cryptocurrency exchange's customers to buy its own cryptocurrency, called the FTX Token. (Saul Loeb/AFP via Getty Images)

Not long after they started the now-bankrupt FTX, an exchange for trading cryptocurrencies, Sam Bankman-Fried and his co-founders decided to make their own virtual currency à la bitcoin.

"There's no reason, if you're in crypto, not to create tokens," says Hilary Allen, a professor at American University Washington College of Law. "You can create tokens out of thin air."

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