Panic: FTX debacle drags the whole crypto market

After a brief and hopeful period, we have some bad news again. FTX, previously the fourth largest crypto exchange worldwide, is facing a “significant liquidity crunch”. Its native token, FTX Token (FTT) has lost over 90% since November 5 [CMC] and Binance was aiming to buy the exchange to protect its users and investors. The whole FTX situation has spread panic in crypto, whose market cap has decreased by over 24% so far.

We can say everything started last week when some reports disclosed that Alameda Research held too many FTT tokens. Both FTX and Alameda Research (a trading firm) were founded by Sam Bankman-Fried (SBF), and are very tied to each other. On the other hand, 바이 낸스 was an early investor of FTX in 2019, but they parted ways last year —apparently, due to different opinions about crypto regulation.

SBF has been lobbying for tighter regulations against Decentralized Finance (DeFi). He even 제안 that DeFi providers should register as traditional financial brokerages, thus, identifying all their customers and highly increasing the entry barrier to the ecosystem. Everything indicates that Changpeng Zhao (CZ—Binance head) doesn’t agree with this at all.

On November 6, CZ announced that they’d liquidate their remaining stash of FTT tokens. That was around 23 million FTT, or about $529 million. The movement, as CZ 설명, was “due to recent revelations that have come to light”. Those recent revelations, of course, were about the FTX insolvency, already rumored then.

Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.
— CZ 🔶 바이 낸스 (@cz_binance) November 6, 2022

Such a big sale was likely the last hit that sent FTX to the edge. By November 8, SBF and CZ agreed that Binance would buy FTX for an undisclosed amount. But this may not be a solution, after all.

FTX crypto debacle continues

그들이 발표 today, Binance is walking away from the FTX deal. Since the beginning, they only signed a non-binding Letter of Intent (LOI), which isn’t a legally binding contract, only an offer that could be revoked at any time. And that seems the case now. After reviewing FTX’s structure and internal finances in detail, Binance decided that they’re beyond its help.

“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com. Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help”.

Sadly, this implies that around $3.2 billion in FTT market cap are likely gone now, not to mention the funds from FTX clients so far. Bitcoin (BTC) was also harshly hit by the panic, decreasing to $15,800 per token (-23% in two days). 솔라나 (SOL), a token that has been strongly supported (and bought) by FTX and Alameda Research, suffered a decrease of over 62% since November 7.

FTX-crypto-debacle-solana — Solana price crash after FTX [CMC].

Some experts are already comparing this case to the Terra (LUNA) collapse, but we still ignore the extent this time, since it’s a developing story. FTX and SBF haven’t commented anything yet about Binance withdrawing its offer. Alameda Research website went private, FTX halted withdrawals, and US regulators are watching the case.

거래하고 싶어 BTC, ETH 및 기타 토큰? 넌 할 수있어 안전하게 Alfacash에서! 그리고 우리가 이 주제와 다른 많은 주제에 대해 소셜 미디어에서 이야기하고 있다는 것을 잊지 마세요.

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