Results of the week: FTX filed for bankruptcy, and the head of Binance warned of the “cascading” crisis
FTX Group filed a bankruptcy statement, Sam Bankman-Fried resigned, Chanpen Zhao warned of the “cascading” crisis in the crypto industry and other events of the outgoing week.
Bitcoin tested marks below $ 16,000 against the background of ftx collapse
Against the background of the crisis and subsequent bankruptcy of the FTX exchange, Bitcoin tested the marks below $ 16,000. According to Coingecko, over the past week, the quotes of the first cryptocurrency collapsed by 22%.
At the time of writing, the asset is traded near $ 16,580.
According to the results of the week, all digital assets from the TOP-10 on capitalization were in the Red Zone. The worst dynamics was shown by Dogecoin (-29.8%) and XRP (-28.7%). Against the backdrop of the problems of Alameda Research, Solana quotes collapsed by 60% – cryptocurrency sank to 15th place in the Coingeco rating.
The total capitalization of the cryptocurrency market fell to $ 867 billion. Bitcoin dominance index decreased to 36.6%.
On November 6, the head of Binance, Chanpen Zhao, announced the desire to get rid of FTX TOKEN (FTT), which, together with BUSD, is a total of ~ $ 2.1 billion of the company out of the company’s portfolio investment in FTX. He promised to minimize the influence of the transaction on the market and expressed his readiness to complete it within several months.
CEO belonging to Sam Bankman-Frida Alameda Research Caroline Ellison reported to redeem from Binance Utility Token at a price of $ 22 per unit.
On the morning of November 8, the market began to storm. Bitcoin sank below $ 20,000, and investors hastened to get rid of FTX and AlaMeda Research assets. Among them, except FTT, were SOLANA, SERUM and BITDAO (BIT).
At the same time there was a significant outflow of liquidity with FTX. As it turned out later, $ 6 billion was withdrawn from the platform in 72 hours from the platform. In the evening of the same day, the exchange reported that the line of applications for the withdrawal is reduced to a “reasonable level”, and Bankman-Fried assured that the assets are in order. At this time, the network continued to complain massively about the inability to withdraw funds.
A few hours later, CEO Binance said that FTX has encountered liquidity crisis and turned to her for help. The strategic agreement also implied a possible absorption of FTX International (this story did not affect the American branch). Bitcoin reacted to the news with a sharp height of $ 1000.
When the euphoria passed, the quotes began to fall rapidly. By evening, I tested $ 17,000. Investors were also in a hurry to get rid of ftt. Over the first day, Sam Bankman-Frida collapsed by 94%-from $ 15.6 billion to $ 992 million (even later to zero).
The FTX crisis provoked a new trend – Binance promised to submit a report on the balance of its wallets and replenished the Safu Reserve Fund. The initiative was supported by other players, including Kucoin, OKX, Huobi, Gate.Io and Crypto.Com.
The possible cause of a sudden collapse was the first to be called in Coin Metrics – Chapter R&D Lucas Nutzci suggested that FTX provided Alameda Research FTT for $ 4.19 billion. He noted that the starting point was the problems of the hedge fund Three Arrows Capital and the Terra ecosystem preceding this collapse. Alameda “survived” thanks to funding from FTX, concluded Lutzzi.
Another analytical service-Glassnode-later appreciated the scale of the FTX, Alameda Research and Binance oncache-metrics.
Leading players hastened to refute the connection with FTX and ALAMEDA. Among them are Coinbase, Circle, Kraken, Bitfinex, Cumberland Anthony Hopkins , Deribit and a number of others. In the process of discussing the terms of the transaction, Chanpen Zhao called for refraining from trade FTT and said that the competitor’s difficulties were not Binance. In a letter to employees, he noted that the appeal of Bankman-Fried for help was a surprise for him.
On the evening of November 9, Binance refused to buy FTX, noting significant discrepancies in the company’s balance sheet. By this moment, the fact of using client funds by Bankman-Fried has become more and more obvious. After the refusal of Binance of the purchase of the platform, the founder of Tron Justin San said that together with the FTX is a possible solution.
On the night of November 10, Bitcoin collapsed below 16,000, and Ethereum – below $ 1100. Swift correction led to the panic of SOLANA validators. Due to the connections with AlaMeda, the latter decided to withdraw a significant amount of stakeing assets (30 million SOLs). Crypto platform.COM even suspended USDC and USDT on SOLANA.
A joint decision with Justin San was a limited withdrawal of funds in TRX, JST, BTT and other assets affiliated with it. Users had no choice but to buy these coins. The difference is in the course with other sites provoked additional losses.
The media began to massively report the “hole” in the balance of ftx. According to various estimates, it varied from $ 4 to $ 8 billion. The company’s branches began to close due to pressure from local regulators. The Bahamas Securities Commission blocked the FTX assets, and in Cyprus the company decided to withdraw a license that allowed business in Europe.
Left of the main office began, employees said that they had lost their funds. At the request of law enforcement officers, at the time of the investigation, Tether froze FTX $ 46 million in USDT.
Bankman-Fried said that, despite the liquidity crisis, the cost of FTX assets exceeds customer deposits. Justin San announced his readiness to provide “billionth help”. However, it was probably not enough. The media indicated that at meetings with investors, Bankman-Fried voiced a figure of $ 10 billion.
On November 11, FTX Group, which includes 130 legal entities, submitted a bankruptcy statement, and the head of the exchange resigned to CEO.
The next day, unknown people deduced more than $ 400 million in digital assets from FTX wallets. According to some estimates, the total volume of displaced funds has already reached $ 600 million.
What to discuss with friends?
- SEC is interested in promoting crypto projects Hex, Pulsechain and Pulsex.
- A resident of the United States pleaded guilty to Silk Road fraud at 50,000 BTC.
- Tornado Cash was accused of promoting the financing of the DPRK nuclear program.
- Meta fired 11,000 employees.
Huobi accused the Pnetwork team of “malicious behavior” in the incident with Gala
Huobi noted that the Gala Games and Pnetwork teams could use a safer method for eliminating vulnerabilities. The developers informed the exchange on unofficial channels about their actions 50 minutes before the “hacking”, leaving no time to an adequate reaction.
The court recognized the LBRY startup tokens with securities
The court granted the lawsuit of the US Securities and Exchange Commission to LBRY blockchain startup with accusations of violation of securities legislation when selling its own tokens. The regulator filed a lawsuit to LBry in March 2021.
CEO startup Jeremy Kaufman believes that the process has created an extremely dangerous precedent that turns every cryptocurrency into the United States into security, including Ethereum. Other experts believe that a verdict in the case with LBry can become a precedent for Ripple.
The developers added a cross-bridge aggregator to Metamask
Metamask Bridges is designed to move tokens between networks. The service combines the best routes taking into account the time, cost and safety factor. Metamask Bridges is available in mobile and desktop versions within one window through Portfolio Dapp. The commission is not charged during the beta test.
Chanpen Zhao warned of a “cascading” crisis in the crypto industry
The current situation in the cryptocurrency industry is echoing with the financial crisis of 2008, and in the coming weeks even more companies may crash. This opinion was expressed by CEO Binance Chanpen Zhao.
At the conference in Indonesia, he suggested that the market has yet to feel the consequences of the crisis of the FTX crypto -rope and the associated Alameda Research.
Also on FORKLOG:
- CFPB has called the most popular schemes of bitcoin canom since 2018.
- Binance announced plans for the integration of bitcoin payments in “DIY”.
- WSJ announced the sale of bitcoin malers at a discount above 70%.
- Michael Seilor confirmed the Microstrategy course for further purchases of bitcoin.
What else to read?
In new educational cards, they told what an automatic market maker is.
In traditional digestes, the main events were collected for a week in the areas of cybersecurity and artificial intelligence.
The cryptocurrency industry is attracted by an increasing number of institutional players. This is evidenced by new investments in infrastructure and more close attention, which companies show to bitcoin as a class of assets. The most important events of the last weeks are in the FORKLOG review.
Read the FORKLOG Bitcoin News in our Telegram-cryptocurrency news, courses and analytics.