Market Update: Everything we know about FTX (so far)
15 Nov 20223min
The past week has been a whirlwind for cryptocurrency markets and the news cycle has spiralled over the ongoing FTX contagion. In case you missed it or just can’t keep up with it all, we’ve put together a quick summary of everything that has gone on between Binance, FTX and other parties involved that is currently impacting the market and industry as a whole.
On Sunday 6 November, Binance co-founder and CEO Changeng ‘CZ’ Zhao announced Binance was liquidating its holdings in FTT tokens, the cryptocurrency native to crypto exchange FTX setting off a massive wave of sell-offs in FTT.
As the events unfolded on Monday 7 November, it was revealed FTX is facing a liquidity crisis (based on FTX reportedly using its FTT token to inflate assets against liabilities) and CEO Sam Bankman-Fried sought funding from various investors. Binance agreed to buy FTX’s business outside of the U.S.
Two days after the acquisition announcement, on Wednesday 9 November reports confirmed Binance had backed out of the potential deal, citing “mishandled customer funds and alleged U.S. agency investigations.”
The speculative crisis became a reality on Friday 11 November with FTX filing for bankruptcy and Bankman-Fried confirming his resignation. The days following this have seen the Manhattan U.S. Attorney’s office launch an investigation into FTX and Bankman-Fried amid reports that it lent customer funds to a linked fund, Alameda Research without their consent.
Without a doubt, these events have raised some concerns amongst crypto investors and have been disappointing to witness for the industry.
Here is a quick snapshot:
- Last week we witnessed one of the largest global digital currency exchanges FTX experience a liquidity crisis.
- Further developments over the weekend revealed FTX and its subsidiaries have announced bankruptcy.
- There is now an international investigation underway into business practices by FTX and Alameda Research (a fund linked to FTX founders) that is at the core of FTX’s liquidation.
Where do things stand now?
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Last Updated: 15/11/22