Crypto’s ‘Lehman Brothers moment’? BInance renounces the acquisition of FTX


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Investing.com – After reviewing the structure and accounts of the FTX platform, Binance is considering backing out of buying the company, after announcing yesterday that it planned to acquire the company to save it.

According to a report by The Wall Street Journal, Binance executives discovered a major financial liquidity hole that cast doubt on whether the company could even be saved.

Yesterday, after the collapse of FTT, the native token of FTX.com, Changpeng Zhao, CEO of Binance, said that he would proceed with the bailout to avoid contagion in the sector.

Sam Bankman-Fried, CEO of FTX, claimed via his Twitter account on Monday (NYSE:) that the company was doing “good” and then deleted the posts. A few months earlier, while admitting that she was not immune to the cryptocurrency winter, she offered to financially support other affected businesses.

But the FTT was already down last week, then Binance decided to liquidate its holdings, causing the token to plummet.

Alarm signal

Alarm bells were sounded when a CoinDesk report claimed that Alameda Research, Bankman-Fried’s quantitative trading firm, had more liabilities than assets in FTT.

Yesterday, Bankman-Friedel confirmed that it will indeed sell the platform to Binance. The announcement caused the TTF to collapse and impacted the entire industry. fell by 12% and Ethereun by 15%.

This year, the cryptocurrency crash has led to other similar situations. Celsius, a cryptocurrency lending company, filed for bankruptcy after the collapse of the stablecoin and its crypto-sister Luna.

Three Arrows Capital and Voyager Digital also went bankrupt. Liquidity problems worsened and led to the decline.

Today, with the collapse of FTX and the bailout of Binance looming, there are renewed fears that the crypto industry’s “Lehman Brother” moment may intensify, with the big difference that in this case the rescue could only come from the private sector.

“Most of the activity in crypto is still trading and speculative, so overall the impact of any decline in crypto is also quite limited in some ways,” a CNBC report quotes Vijay Ayyar, international head of cryptocurrency exchange Luno, as said.

In this way, the expert minimizes contagion effects.

“With banking and financial services in 2008, the impact was much more entrenched and widespread,” he added.

By Carjuan Cruz



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