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Voyager Capital went through it. 3AC went through it. And now, financial doom seems to be fast approaching FTX.
If the recent history of the crypto market has informed us of anything, it’s that this industry is a never-ending saga of the rise and fall of corporate behemoths.
We see an occasional, authentic crypto-champion ready to shake up conventional financial markets and provide disruptive technology.
And as always, there is a slight shudder of rejection before financial markets shake the crypto champion off its hide.
Everything that happens after is commonplace – downsizing, user withdrawals, crashing token price and the final zinger: bankruptcy.
What was once a billion-dollar valuation turns into a set of papers rifled through by the bankruptcy courts, in the Virgin Islands or the mother economy itself, the U.S.
This narrative that is propagated across mainstream media has become so common now that it is no longer a question of whether crypto firms will sink, but when, why, how and most important: which company is it?
Today, that same narrative has touched FTX, a corporate giant in the list of legitimate crypto-currency exchanges.
FTX, previously managed under leadership of Sam Bankman Fried, known as the crypto kid, reached out to Binance for support.
The third largest crypto exchange, facing liquidity issues, was unable to provide its users the ability to withdraw their funds.
On the back of a token – FTX’s digital token, the FTT – that was rapidly plunging, the company was headed for bankruptcy.
In a small ray of hope, Binance signed a non-binding letter of intent to purchase the struggling crypto-exchange, a deal which the largest crypto-exchange had immediately backed out from, a day after it was made.
Binance made the following statement:
“In the beginning, 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,”
The offer to buy FTX was made on the 8th of November and the refusal to buy from Binance was made on the 9th of November.
It didn’t take long for FTX to call it quits after Binance pulled back its lifeline.
On the 11th of November, FTX filed for a chapter 11 bankruptcy in the U.S, the same measure undertaken by firms such as Voyager Capital, 3 Arrows Capital and Celsius.
FTX has a huge gap in its balance sheet, a black hole of $8 billion between assets and liabilities.
The FTT, FTX’s native digital token, has made a downward spiral of 92% over the last 7 days.
What’s next for FTX?
In a mysterious move from FTX, a large batch of FTT tokens were released from its main deployer address out of schedule.
192 million tokens were released, amounting to $400 million.
FTT tokens are released periodically making this large infusion of tokens a huge surprise to investors and other exchanges.
In response, Binance and Huobi have stopped all FTT deposits, awaiting more information either from the market or FTX itself.
This article is sourced from the following links:
How Binance played a key role as FTX collapse unfolded | Cryptocurrencies | The Guardian
What Happened to FTX? Here’s What to Know. - The New York Times (nytimes.com)
Binance stops accepting FTX's token for deposit, CEO says | Fox Business
Crypto markets rattled as FTX warns of bankruptcy without $8bn after Binance pulls out (thenationalnews.com)
Binance, Huobi Block FTT Deposits After $400M Worth of Tokens Illicitly Released (coindesk.com)
Bitcoin plunges as Binance walks away from FTX bailout. Is this the new crypto crisis? | Euronews
FTX Token price today, FTT to USD live, marketcap and chart | CoinMarketCap