Crypto in Meltdown After FTX Collapse: Will Binance Be the Saviour?

  • November 9, 2022
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CZ made a dramatic move and now history could be in the making with Binance set to takeover FTX after the events of the last 24 hours.

All eyes are set on Sam Bankman-Fried and his company Alameda Research after Binance CEO Changpeng Zhao confirmed the liquidation decision of FTT, the native FTX token. This will see $529 million FTT being placed for sale over the next few months.

As the risk of an FTT collapse is real, the former billionaire found himself in a more uncomfortable situation when rumors of secret insolvency made the headlines and investors started fleeing their assets from the exchange.

Binance Could Take Over FTX

The 48-hour roller-coaster drama, however, reached a shocking conclusion when Binance CEO Changpeng Zhao announced Binance Holdings entered into a non-binding agreement to acquire FTX.com.

Binance issued a letter of intent (LOI) to accelerate the acquisition, according to CZ’s official account.

CZ highlighted that the move is aimed at protecting users,

“This afternoon, FTX asked for our help. There is a major liquidity crisis. To protect users, we have signed a non-binding letter of intent (LOI), intending to fully acquire FTX and help cover the liquidity shortage. We will provide a full update on the matter in the coming days.”

CZ’s announcement came after Bankman-Fried mentioned the conclusion of “an agreement on a strategic transaction with Binance.” The battle of these two billionaires is seemingly reaching a closure with a win for Binance.

Bankman-Fried also shares the same purpose with the CEO of Binance: to protect users.

Analysts who had taken note over the last few days speculated FTX and Alameda had performed shady practices in the LUNA crash and the series of acquisitions linked to the incident.

Too Many New Purchases

The private balance sheet of Alameda Research released last week apparently set fire to the FTX empire. Binance CEO stepped up with tricks of trade, putting the top-tier exchange in a position whereby Bankman-Fried surrendered.

FTX’s liquidity crisis is yet a possibility but given how its leader handled the situation, the wrapped weakness didn’t matter any longer.

Many believe that if FTX had followed the same path of LUNA, there would have been a bigger domino effect, which would have plunged the market back into blood. As far as we’ve known, this scenario is likely out of sight.

The Aftermath

After a sudden burst of conflict between the two prominent exchanges, the situation lapsed back into calmness for the two parties. But the bolt turbulence triggered massive selloffs.

The world’s largest digital currency Bitcoin (BTC) fell more than 10% to around $18,300, according to CoinMarketCap. Earlier in the day, BTC fell to $17,300.80, its lowest mark since November 2020.

Ethereum, the second-largest digital currency, also dropped 10% to $1,300, after falling as low as $1,228.89 on Nov. 8. In addition, hundreds of other cryptocurrencies also suffered price declines, showing unstable investor sentiment.

Beginning or End?

In the widespread slump across the market, small crypto assets tied to Alameda, the trading firm also owned by FTX executive Sam Bankman-Fried, have suffered some of the biggest losses.

FTX token (FTT), the native token of the FTX exchange, fell 76.4%. The token tied to Alameda-backed Solana (SOL), lost 26.4%.

FTX CEO Sam Bankman-Fried revealed that FTX has recorded more than $6 billion withdrawn from the exchange in the last 72 hours, and withdrawals will continue to be suspended.

A night of upheaval wiped out more than 90% of Sam Bankman-Fried’s fortune and stripped him of his billionaire title.

According to updated statistics from the Bloomberg Billionaire Index, the total net worth of the FTX boss is currently about $990 million, showing a massive decline compared to the previous $16 billion.

Sam Bankman-Fried was said to be the “white knight” of the crypto market when he made rescuing deals to bail out troubled lenders during the market downturn.

The founder of FTX warned in June that some crypto exchanges were secretly failing, and he literally meant that.

The post Crypto in Meltdown After FTX Collapse: Will Binance Be the Saviour? appeared first on Blockonomi.

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