 | On the 11th November 2022, FTX filed for bankruptcy after freezing customer withdrawals because they could no longer meet the demand for customer withdrawal requests. Many of us probably know the story, but this event was (mostly) precipitated by CZ/Binance's annoucement of a decision to liquidate their FTT holdings. Binance's decision itself came from loss of trust/speculations surrounding Alameda Research, the trading firm that was also run by SBF, holding extremely large amounts of FTT(as well as SOL) on their balance sheet which they used as collateral for loans. Per Coindesk reported 2nd Nov 2022 Per Coindesk reported 2nd Nov 2022 Per Coindesk reported 2nd November There was/is also a lot of backroom talk about disagreements between SBF and CZ such that SBF was through Binance and other exchange under the bus during talks with regulators. Regardless, it just took a few days for market panic to set in, particularly because Binance's announcement took place over the weekend and the majority of trading happens during the week. FTT's price started sliding slowly then suddenly snowballed and hit fever pitch. FTX customers then began to panic withdraw funds followed by SBF putting out bewildering statements that "FTX was fine" and FTX posting pictures(now deleted) about their new corporate buildings. As we know everything was definitely not fine as they later closed withdrawals. There was then a very strange "FTX credit facility" whereby customer could withdraw but only using tokens owned by Justin Sun(BTT,SUN,JST,TRX,HT etc) which caused the price of these tokens to jump by as much as 4600% over market price on FTX. Soon after however, they later filed for bankruptcy whereupon insiders too advantage by stealing customer data, draining customer funds etc. The FTT deployer was also drained as massive supply was suddenly unlocked. Bitcoin price dropped to as low as $16,300 from around $20,300 just days prior. Bitcoin is now around 130% higher than it was a year ago with seemingly more room to go and the price continues to appreciate. This turned out to be a great buy low sell high scenario. [link] [comments] |
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