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Binance to acquire FTX

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Re: Binance to acquire FTX

#201

Post by TravelTechGuy »

Some more background: the companies were engaged in fighting over regulations, and on a personal basis between the 2 CEOs. It went down to really childish levels at some point.

But one thing is undeniable: SBF (FTX CEO) was trying to weaponize US regulation against his biggest rival CZ (Binance CEO). CZ retaliated by selling the FTT token, exposed the fact FTX was over-leveraged, and took over.

This is, as the kids on Twitter say, the embodiment of the old "F#$k around, find out".

Along the way every FTX client who couldn't withdraw, and every crypto user losing value got screwed - but why should these 2 characters care? The space just became more centralized, and whatever smidge of trust was left after the Celsius debacle has evaporated.

Re: Binance to acquire FTX

#202

Post by PaywallBuster »

ucha wrote: post #16

SBF 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…

https://www.investopedia.com/terms/c/cashandcashequivalents....

> Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately.

> Cash equivalents include bank accounts and marketable securities such as commercial paper and short-term government bonds.

> Cash equivalents should have maturities of three months or less.

Don't know specifics on FTX/Alameda but this is probably normal to a degree for banks/brokers or just any regular business?

Re: Binance to acquire FTX

#203

Post by kikokikokiko »

pcai wrote: post #185
yucky wrote: post #183

Earlier quoted context omitted.

If everybody walked into their bank right now to withdrawal, they couldn't cover either. Right?

But their point was: FTX doesn't purport to be a bank

It doesn't purport to be a HUGE PONZI either, but... Just another normal day in crypto land.

Re: Binance to acquire FTX

#204

Post by eftychis »

I think the title is incorrect (someone else noted too!). It should be "Binance sends non-binding Letter of Intent [to buy] to FTX."

Less sexy, more accurate.

Also, extremely likely they are trying to consolidate power and they orchestrated this situation I'd say. This "smells" hostile takeover, but in a currency setting. a) They sold FTT in a "dumpy"/reevaluate its price way b) they were asked for a loan or partial buy to add influx c) they sent a "we will just buy you."d) They sent messages that would erode the trust to the eyes of the world.

Rings a bell? (Spoiler: see Twitter.)

Re: Binance to acquire FTX

#205

Post by jimcavel888 »

ww520 wrote: post #143
kuratkull wrote: post #119

Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Binance declined - this was yesterday/today. Of course the price of FTT crashed today. And now Binance buys FTX to help them out... smells like Binance played 4D chess all along. https://decrypt.co/1136…

Isn't FTT like FTX's own issuing tokens? It's like printing one's own money. But when the backing firm fails, the printed money is worthless, just like what LUNA issued by Terra had become.

No post body was provided.

Re: Binance to acquire FTX

#207

Post by Bubble_Pop_22 »

Aaronstotle wrote: post #173

Every exchange needs to show proof of reserves, I don't have much faith that Binance is in much better shape than FTX.

Exchanges big wallet are public info on the blockchain IIRC. The huge problem is that you'll never know if they add up because you'd need confirmation from every user of the exchange who'd have to self-declare their crypto-wealth in some sort of Slack or Telegram group so that you then can compare the 2 totals and see if x=y.

Will never happen. They are black boxes. Only them know if 1:1

Re: Binance to acquire FTX

#208

Post by purple_ferret »

kuratkull wrote: post #119

Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Binance declined - this was yesterday/today. Of course the price of FTT crashed today. And now Binance buys FTX to help them out... smells like Binance played 4D chess all along. https://decrypt.co/1136…

Binance continues to amaze.

Does anyone even know where it operates out of these days?

Re: Binance to acquire FTX

#209

Post by candiddevmike »

eftychis wrote: post #196
shapefrog wrote: post #26

Earlier quoted context omitted.

12:38 PM · Nov 7, 2022 2) FTX has enough to cover all client holdings. [0] 4:03 PM · Nov 8, 2022 2) Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. [1] has enough to cover all client holdings ---> not enough to cover all client holding in 24 hours. Either they los…

As other people said, usually a lot of assets are illiquid in 24 hours. You can say I have money to buy this house, but if I ask you for the money the next 24 hours, most people will say they need more time to liquidate. It is actually irresponsible to the users (risk management wise) to be keeping all that cash in hand 24/7. The easiest bad case example: are you keeping all your savings under your mattress? Edit/to…

I'm not a business masquerading as a bank, lol.

Re: Binance to acquire FTX

#210

Post by kasey_junk »

pcai wrote: post #185
yucky wrote: post #183

Earlier quoted context omitted.

If everybody walked into their bank right now to withdrawal, they couldn't cover either. Right?

But their point was: FTX doesn't purport to be a bank

https://www.fdic.gov/news/press-releases/2022/ftx-harrison-l...

Well…

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