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Binance to acquire FTX

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Re: Binance to acquire FTX

#71

Post by v8xi »

lordnacho wrote: post #45
edf13 wrote: post #39

Earlier quoted context omitted.

CZ said it’s dumping all their tokens from Binance… FTX starts to fail… CZ snaps it up for a song

I heard that as well, but how did FTX put themselves in a position where that can happen? Leveraging up in your own token?

There was a report that came out a few days ago claiming that Alameda Research (SBFs company) was insolvent / did not have enough cash to cover their FTT liabilities[1]. CZ begins dumping their FTX token to de-risk and that led to them actually being insolvent.

[1] https://dirtybubblemedia.substack.com/p/is-alameda-research-...

Re: Binance to acquire FTX

#72

Post by FormerBandmate »

mamonster wrote: post #49
steveBK123 wrote: post #38

This 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.

Their stock value is down, but they still are financially solvent. Lehman didn't explode when it fell from $60 to $6, it exploded when it went bankrupt. They're a lot closer to it now then a year ago, however

Re: Binance to acquire FTX

#73

Post by jefftk »

max_ wrote: post #67
jefftk wrote: post #47

Earlier quoted context omitted.

> 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.

He admits they were illiquid and needed Binance to cover withdrawals 1:1. >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. It may take a bit to settle etc. [0]: https://twitter.com/SBF_FTX/status/1590012124864348160

Sorry, edited my comment to quote the section of yours I was trying to reply to

Re: Binance to acquire FTX

#74

Post by JumpCrisscross »

gitfan86 wrote: post #64
JumpCrisscross wrote: post #59

Earlier quoted context omitted.

FTX bet customer funds through the CEO’s hedge fund on an FTX token [1]. The token price fell when this was revealed [2]. The hedge fund, and thus FTX, had less money than they owed lenders and customers. FTX found a bail-out in Binance; otherwise everyone would have lost their money. [1] https://www.coindesk.com/business/2022/11/02/divisions-in-sa... [2] https://www.coindesk.com/markets/2022/11/08/ftt-plummets-as-..…

It isn't officially a bailout. They just said they intend to acquire FTX. But, once they look at the books they may backout out the deal, especially if most customers want to take their money out. What is the point of buying an exchange that has no customers?

> isn't officially a bailout. They just said they intend to acquire FTX

That's a bailout.

> once they look at the books they may backout

It's not a done deal. But the proposal is a bailout, through and through.

Re: Binance to acquire FTX

#75

Post by wmf »

janmo wrote: post #8

Title is incorrect, they signed a non-binding LOI. They will first do a lot of Due Diligence and might back out of the deal anytime.

FTX needs cash right now and either Binance will provide it right now or they won't.

Re: Binance to acquire FTX

#76

Post by wmf »

max_ wrote: post #57

Its funny how a few days back some people on HN were saying FTX is unlikely to be illiquid because SBF is a genius from JaneStreet.

He sacrificed FTX but kept his real baby Alameda.

Re: Binance to acquire FTX

#78

Post by tootie »

JumpCrisscross wrote: post #53
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…

> SBF said "We don't invest client assets (even in treasuries)" We know that was false when it was said, given the Alameda balance sheet. (FTX invested in Alameda which made risky loans to crypto folks and bought FTT, which FTX minted [1].) [1] https://www.coindesk.com/business/2022/11/02/divisions-in-sa...

I know the SEC is struggling to stay on top of the crypto market, but it certainly seems like SBF should be in an absolutely huge amount of legal jeopardy right now. And if he isn't, then the crypto market is beyond saving and deserves to die.

Re: Binance to acquire FTX

#79

Post by janmo »

wmf wrote: post #75
janmo wrote: post #8

Title is incorrect, they signed a non-binding LOI. They will first do a lot of Due Diligence and might back out of the deal anytime.

FTX needs cash right now and either Binance will provide it right now or they won't.

It seems withdrawals are halted, and there is no clarity of weather or not they have resumed after the announcement.

Without withdrawals FTX will loose in importance and value every single hour.

It is hard to build trust as a crypto exchange, but it is very easy and can be quick to lose it.

Re: Binance to acquire FTX

#80

Post by fdgsdfogijq »

SilverBirch wrote: post #40

You know what this makes me kind of wonder... back earlier in the year SBF made a big show of coming in and investing in a bunch of the companies that were collapsing due to the LUNA/3AC/Celsius problems. He stepped in and to some extent halted the unwinding of some of these issues. It turns out now that it's likely FTX is underwater, and Binance is basically doing the same thing - coming in, picking them up cheap an…

In retrospect, something very shady about those deals they made. There may have been more contagion than let on. Or FTX themselves was financially tied to those assets, and was the true actor swindling people through ponzi yield farming schemes.
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