FTX was one of the most trusted exchanges run by Sam Bankman-Fried until the truth behind their FTT token revealed an expensive piece of information. Some days ago, documentation surfaced regarding a balance sheet from the CEO’s Alameda Trading Firm, according to CoinDesk. This balance sheet showed an overabundance of their FTT token, and how it was used to finance their business. It also led to information that now has FTX in trouble with the SEC. All I’m going to say is watch WeCrashed because it sounds like they might have taken a page out of that playbook.
From the information circulating in the crypto world, it doesn’t sound like they had any Bitcoin reserves or things that you would think, an exchange would have to stay afloat. The FTX exchange was worth billions due to the volume of trades going in and out. This wasn’t a small exchange, and the Alameda firm had links to Solana. Twitter has been buzzing with nervous investors for the past 24 hours because of the rumors around two tokens.
One rumor suggested that Alameda might try to dump their SOL to get relief. However, nobody has verified that as of yet. Due to the fear of SOL being dumped, it traded at around $12 today. On Tuesday, the CEO of Binance, Changpeng Zhao stated that Binance would buy FTX. Within 24 hours of going over the financials, he later stated that he would not be able to go forward with the deal.
The conversation is below.
This is a blow to the crypto market because FTX held hands with some major companies. This is why crypto needs regulation, and the sooner that comes, the better off we will all be. There will be a lot of people hurt by the collapse of this exchange. Maybe they will get lucky, and someone else will step in with the ability to save them, but it is a long shot. This situation is 10X worse than LUNA due to the number of people involved. We are talking about numerous people from all different walks of life.
This will be a hard week for crypto. As always, I am not a financial advisor.