How FTX fell apart and what awaits us next
The dust after the battle between Binance and FTX settled a bit and there is time to look at the situation from the outside. For simplicity, I divided the story into 5 parts
1) The Empire of Sam
Curly-haired Sam founded the FTX exchange and the Alameda fund after earning a reputation as an arbitrageur and speculator. He was a cocky krypt who played by his own rules and even survived the collapse of LUNA after which he strengthened his status.
Alameda and FTX made money on SOL and other manipulations. Therefore, in 2022, FTX invested in Aptos / Sui and a number of other projects. And after the LUNA scam, Sam acted as a "savior of the market" by buying out BlockFi and the assets of Voyager, the companies that suffered from the collapse of LUNA. Everything went smoothly.
The empire tottered
On August 24, the Alameda CEO quit, a month later, the FTX president. There were rumors about FTX problems with the regulator.
In addition, Sam began to suck up to the Democrats, donating $ 50 million. In tweets and interviews, he began to call for the regulation of DeFi and the entire crypto market. Naturally, pushing through his interests so that the Americans traded only on his FTX.
Sam and FTX started getting hated in all corners of the crypto community. There was even information that Alameda was saved from bankruptcy during the collapse of LUNA by manipulating the locked FTT tokens.
The king was exposed
On November 2, Coindesk published a research on Alameda's balance sheet. The fund had $14 billion in assets and $8 billion in liabilities.
The most interesting thing is that the assets were in FTT, SOL, SRM tokens, and even in those in locks. In fact, the fund drew assets for itself and, secured by "lilac leaves", took loans for $8 billion.
But liabilities for $8 billion were estimated in stablecoins or real dollars. More thread.
Chinese Dragon Enters the Scene
November 6th CZ reported that Binance is holding 30M FTT which they plan to sell as they don't like Sam and FTX's regulatory actions.
The head of Alameda immediately offers to buy back all the tokens at 22, but CZ refuses, they say, "I'd better sell everything honestly to the market."
With FTX, a massive flight of capital begins, 400 million stables and another 500 million crypts were withdrawn in a day. People are panicking.
FTX freezes the withdrawal of funds and the FTT rate flies from 22 to $15. Sam is silent, the crypto market is falling: SOL, APT, BTC, ETH - everything is being corrected.
CZ waited for the corpse of the enemy to float down the river
CZ tweets that Binance is ready to buy FTX, but first it needs to be checked. Temporarily, the market rises and after half an hour falls even more: FTT flies to $3, the cue ball updates the minimum. Assets from the Alameda portfolio are particularly affected. The list is here.
FTX has borrowed $8 billion and someone will have to pay for it. The market falls as investors save their assets + realize that the collapse of FTX may be followed by the collapse of other platforms, projects or exchanges. Like a snowball.
As a result, Binance refuses the deal, probably FTX has very big problems.
Summary
One of the most daring participants in the crypto market, Sam, was beautifully punished by Binance. While FTX was buying stadiums and eliminating hamsters, CZ was building an ecosystem and eliminating hamsters as well.
It is already known about 10 large companies with tens and hundreds of millions of investments in FTX, which were left with nothing. The collapse of FTX set off a domino effect.
The winner in this story will be the Binance ecosystem: BNB, TWT, CAKE, BNX and other projects.
But be careful, one day all the centralized exchanges you know will close.
© CryptoGuru
