Connect with us

Cryptocurrency

FTX Recruited US Binance CEO, Then Fighting And Rumors Began: 5 Things To Know

Published

1y ago

on

/ 5164 Views

Tensions have been rising for months between the founders of rival Cryptocurrency exchanges FTX and Binance. On Monday, the fight spilled over into the markets, sending the price of Bitcoin, Ethereum, and native FTX token FTT lower.

On Tuesday, Nov. 8, FTX stopped processing withdrawal requests, The Block reported. The last outgoing transaction from FTX took place at 6:37 a.m. ET on the Ethereum blockchain, according to on-chain data.

Here are five things to know.

The conflict

The conflict is between players Sam “SBF” Bankman-Fried — the U.S. founder of trading firm Alameda Research and FTX, the seventh-largest crypto exchange — and Chinese crypto king Changpeng “CZ” Zhao, founder of Binance, the world’s largest exchange.

FTX operates out of the Bahamas and Binance is registered in the Cayman Islands. Both Bankman-Fried and Zhao are billionaires with an estimated net worth of $15.4 billion and $18.9 billion respectively, according to the Bloomberg Billionaires Index.

Bankman-Fried and Zhao have been exchanging hostilities on Twitter for months over issues ranging from lobbying U.S. politicians to allegations of frontrunning trades, Bloomberg reported.


Black Americans Have the Highest Mortality Rates But Lowest Levels of Life Insurance
Are you prioritizing your cable Entertainment bill over protecting and investing in your family?
Smart Policies are as low as $30 a month, No Medical Exam Required
Click Here to Get Smart on Protecting Your Family and Loves Ones, No Matter What Happens

Speculation grew over the weekend about the solvency of Bankman-Fried’s FTX crypto exchange.

FTT, the native token of Bankman-Fried’s FTX

In a Nov. 2 article, crypto news site CoinDesk reported that much of the balance sheet of Bankman-Fried’s trading firm Alameda Research is comprised of FTT, the native token of Bankman-Fried’s FTX. The FTT coin is relatively illiquid, meaning it’s difficult to trade without affecting the price.

On Sunday, Zhao tweeted plans to liquidate his entire position in FTX tokens — Binance’s $530 million holding of FTT — a decision seemingly based on “recent revelations.”

FTX is one of the biggest donors to Washington politicians, but specifics on the types of policy discussed – including anything regarding Binance – are not known, Daily Hodl reported. On Sunday, Zhao tweeted, “We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs.”

Rumors of FTX insolvency

A leaked balance sheet and the Twitter spat between SBF and CZ triggered rumors that FTX could be the next crypto implosion. The CoinDesk report showed a suspiciously close relationship between trading firm Alameda Research and its supposedly independent sister company FTX. While there’s nothing in the rulebook outlawing a trading firm from owning piles of its own token, it signaled to investors that Alameda was banked heavily on a coin its own sister company had created—as opposed to a truly independent asset, such as fiat currency or another crypto token—raising concerns that the firm was built on a house of cards, Fast Company reported.

Bankman-Fried denied insolvency rumors in tweets on Monday. “A comPetitor is trying to go after us with false rumors,” he tweeted. “FTX is fine. Assets are fine. FTX has enough to cover all client holdings. We don’t invest client assets (even in Treasurys). We have been processing all withdrawals, and will continue to be.”

Crypto prices falling

The price of Bitcoin fell 4.4 percent Tuesday to trade below $20,000, Ether declined 5.7 percent and FTT lost almost 20 percent of its value in 24 hours. FTT was trading at $18.85 as of this writing. Solana, a token that CoinDesk reported Alameda held, also tumbled 8 percent in 24 hours, Wall Street Journal reported.

Recent crypto implosions underscore recent market trauma

Crypto has had its fair share of traumatic events in 2022. These include cryptocurrencies TerraUSD and Luna, which tanked in May, wiping out some traders’ savings. That led to infection of crypto hedge fund Three Arrows Capital and crypto brokerage Voyager Digital.

Recent crypto implosions underscore recent market trauma

Crypto has had its fair share of traumatic events in 2022. These include cryptocurrencies TerraUSD and Luna, which tanked in May, wiping out some traders’ savings. That led to infection of crypto hedge fund Three Arrows Capital and crypto brokerage Voyager Digital.

Photos: FTX CEO Sam Bankman-Fried, (Tom Williams/CQ-Roll Call, Inc via Getty) / Binance CEO Changpeng “CZ” Zhao, Web Summit, https://www.flickr.com/photos/websummit/
https://creativecommons.org/licenses/by/2.0/

Trending