FTX Agreement with Binance

#1

Post by prakhar987 » Tue, Nov 08, 2022, 4:09 PM UTC

FTX Agreement with Binance
twitter.com

Re: FTX Agreement with Binance

#2

Post by blitzar » Tue, Nov 08, 2022, 4:19 PM UTC

*CRYPTO EXCHANGE BINANCE TO BUY RIVAL FTX; TERMS UNDISCLOSED

Binance Announces Acquisition Of Distressed FTX After "Significant Liquidity Crunch"

Re: FTX Agreement with Binance

#3

Post by tyho » Tue, Nov 08, 2022, 4:20 PM UTC

Can someone ELI5 what has happened here?

Re: FTX Agreement with Binance

#4

Post by questime » Tue, Nov 08, 2022, 4:22 PM UTC

CZ - "I'm gonna make him an offer he can't refuse."

Re: FTX Agreement with Binance

#5

Post by pain_perdu » Tue, Nov 08, 2022, 4:23 PM UTC

tyho wrote: post #3

Can someone ELI5 what has happened here?

I would also love to see a simple explanation.

Re: FTX Agreement with Binance

#6

Post by [deleted] » Tue, Nov 08, 2022, 4:26 PM UTC

pain_perdu wrote: post #5

tyho wrote: post #3

Can someone ELI5 what has happened here?

I would also love to see a simple explanation.

[deleted]

Re: FTX Agreement with Binance

#7

Post by b0sk » Tue, Nov 08, 2022, 4:27 PM UTC

tyho wrote: post #3

Can someone ELI5 what has happened here?

ELI5: they call themselves “exchanges”. they are more like banks. liquidity crunch means they don’t have money to pay back all the customers.

real bank - fdic protected for people. maybe fed govt bailout

ftx - bailed out by competitor Binance

Re: FTX Agreement with Binance

#8

Post by mjr00 » Tue, Nov 08, 2022, 4:27 PM UTC

tyho wrote: post #3

Can someone ELI5 what has happened here?

To the best of my understanding,

- starting state had FTX as insolvent, but had enough money to cover the withdrawals of their token (FTT)

- Binance CEO announces that they're going to dump all of their FTT because they don't trust the stability of it

- now there's a bank run, and people are making enough withdrawals to expose that FTX is insolvent

- FTX pauses withdrawals (because they don't have the cash)

- Binance bails out FTX by purchasing it

Re: FTX Agreement with Binance

#9

Post by dna_polymerase » Tue, Nov 08, 2022, 4:35 PM UTC

FTX was *throwing* money at everything moving in the crypto space. Where the heck did all the money go? Did they just spend VC money as long as they could and ran out now? Or did all the money disappear through the Alameda pipe? I really hope that there will be an investigation into the whole thing. Liquidity crunch my a**.

Re: FTX Agreement with Binance

#10

Post by JumpCrisscross » Tue, Nov 08, 2022, 4:36 PM UTC

tyho wrote: post #3

Can someone ELI5 what has happened here?

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-...