I’m a little ignorant to the whole crypto ecosystem, so can someone give me a quick rundown on the chain of events that led to this? Seems a little out of left field. BTX, from the outside looking in, looked to be one of the more well run, stable crypto exchanges. $1.02 billion in revenue with $388M in net income in 2021. They didn’t go on any crazy hiring spree when they didn’t have to. Liquidity crisis implies that…
Binance to acquire FTX
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Re: Binance to acquire FTX
#42SBF said "We don't invest client assets (even in treasuries)". [0] He then says the purpose of the transaction with Binance is to "clear out the liquidity crunches". [1] How could there be a liquidity crunch if assets are not invested? You can't do a bank run on an entity that doesn't function as a bank and doesn't invest clients assets... Something is shifty. [0] https://twitter.com/sbf_ftx/status/158959828579870720…
Now it is clear that he was lying.
They stopped processing withdrawals according to on chain data.[0]
[0]: https://www.theblock.co/post/184176/ftx-appears-to-have-stop...
Re: Binance to acquire FTX
#43smells like a crypto pump and dump to me, we shall see
More like a dump and pump
Re: Binance to acquire FTX
#44SBF said "We don't invest client assets (even in treasuries)". [0] He then says the purpose of the transaction with Binance is to "clear out the liquidity crunches". [1] How could there be a liquidity crunch if assets are not invested? You can't do a bank run on an entity that doesn't function as a bank and doesn't invest clients assets... Something is shifty. [0] https://twitter.com/sbf_ftx/status/158959828579870720…
This a.m. before securing an emergency lifeline from rival Binance, FTX was canvassing deep pockets in Silicon Valley and Wall St — think billionaires, not institutions — ppl familiar told me & @lmatsakis @SaacksAttack. Two of the ppl he was seeking more than $1bn.
https://twitter.com/lizrhoffman/status/1590021299295768578
He / his people didnt call me, but I would have passed anyway
Re: Binance to acquire FTX
#45Re: Binance to acquire FTX
#46So wouldn't this trigger and potentially be blocked by CFIUS? Given Binance's Chinese roots and the general anti-China sentiment in US politics. Here is an article about the twitter acquisition also with Binance/CZ onboard - this would similar or worse, no?: https://www.brookings.edu/research/the-national-security-gro... The national security grounds for investigating Musk’s Twitter acquisition
This is article says it is only the non-US part of FTX that is in play: https://www.cnbc.com/2022/11/08/binance-offers-to-buy-ftxs-n... Binance offers to buy FTX’s non-U.S. operations to fix ‘liquidity crunch’ The acquisition impacts only the non-US businesses, FTX.com. FTX.us will remain independent of Binance. The deal, according to Tweets from both Zhao and Bankman-Fried, rests on a non-binding letter of intent, p…
> it is only the non-US part of FTX that is in play
The U.S. subsidiary had to follow rules that made FTX’s shenanigans more difficult.
Re: Binance to acquire FTX
#47SBF said "We don't invest client assets (even in treasuries)". [0] He then says the purpose of the transaction with Binance is to "clear out the liquidity crunches". [1] How could there be a liquidity crunch if assets are not invested? You can't do a bank run on an entity that doesn't function as a bank and doesn't invest clients assets... Something is shifty. [0] https://twitter.com/sbf_ftx/status/158959828579870720…
Now it is clear that he was lying. They stopped processing withdrawals according to on chain data.[0] [0]: https://www.theblock.co/post/184176/ftx-appears-to-have-stop...
> They stopped processing withdrawals
If you look at the comments on https://news.ycombinator.com/item?id=33518961 that article missed that FTX uses multiple addresses for withdrawals.
Re: Binance to acquire FTX
#48Do we have a price/valuation?
Re: Binance to acquire FTX
#49This is great, he was lecturing how stock exchanges should work & on the cover of Fortune as the next Warren Buffet all of what.. 8 weeks ago? SV fintech keeps reinventing all the mistakes of 19th century banking. BNPL is the next explosion btw.
BNPL has already exploded though, but good call. Klarna is down about 90% in the private markets, Affirm about the same from all time high.
Another good candidate is "AI-powered" insurance i.e Lemonade.
Re: Binance to acquire FTX
#50So this is presumably going to stop the bleeding for customer deposits at FTX. I wonder how this all shakes out with Alameda - because it looked extremely likely that Alameda and FTX were doing a fair amount of business between each other, and now Alameda likely will be forced to unwind a load of illiquid shitcoin positions, CZ isn't going to want those loans outstanding (or maybe he will - pull the same move again a…
I think Alameda only held those positions in service to their market making operations, not FTX operations.
The line between where FTX starts and Alameda ends always confused me.