Solana: FTX Rescue Might Fail – The Crisis Is Just Beginning – The Crypto Ice Age Is Approaching



Investing.com – Yesterday it already appeared that the FTX exchange would no longer be able to process withdrawal requests from its customers, at least temporarily. The self-issued FTT token lost more than 80% of its value on the official announcement to halt withdrawals, making things dire for CEO Sam Bankman-Fried.

The token had been deposited as collateral for multi-billion dollar credits intended to stimulate growth. The house of cards built on the FTT token is currently collapsing and users of the FTX exchange are left with only the dubious hope of being taken over by another exchange.

While Coinbase (NASDAQ:) CEO Brian Armstrong says he has no business relationship with FTX and its subsidiary Alameda Research, the situation is different for Binance.

CEO Changpeng Zhao (CZ) owns a considerable share of the FTT tokens in circulation. Before the fall, these were worth over $500 million and CZ threatened to get rid of them, as he no longer wanted to support Sam Bankman-Fried (SBF).

A few months ago, SBF declared that it would support the American electoral campaign with up to a billion dollars. It would thus have bought political influence and its competitor CZ would have seen its efforts on the American market threatened. Things apparently got so bad behind the scenes that he was no longer willing to hold FTT.

Right now, it looks like Binance is taking over FTX’s business, which would make CZ the most powerful man in the crypto industry.

But the takeover of FTX by Binance is far from improving the situation. Alameda Research is a big market maker in the DeFi market and if defaults were to occur here, entire ecosystems could be shaken, like in the Terra-Blockchain crash.

Even if SBF and CZ reach a commercial agreement, it is still far from certain that this market will materialize. Regulators also have a say, and Binance is already in the crosshairs of the US Department of Justice, as Reuters reported. These are nothing less than violations of the provisions of the Money Laundering Act.

Dr. Thibault Schrepel, who encourages more than 50 antitrust authorities to cooperate at Stanford University with the “Computational Antitrust” project, said of the proposed agreement:

“Next time, you should check if your tweet even complies with antitrust laws before posting it.”

Circle CEO Jeremy Allaire even talks about the Lehmann Brothers moment:

“At the end of the day, for me, having worked in this sector for ten years, it’s disappointing. A technology born in reaction to the bankruptcy of Lehman Brothers in 2008 has degenerated into its own version of this same bankruptcy. Lehman Brothers was the point of the 2008 global financial crisis”.

It is above all Solana who shows how great the risk of contagion is, because the current price is losing more than 35% of its value. (-10%), (-16%), (-6%), . (-15%), (-17%), (-11%), they only know one direction: downhill.

The rise and fall of Sam Bankman-Fried

Sam Bankman-Fried used the cryptocurrency market for his meteoric rise. From small arbitrage crypto transactions with Bitcoin, Ethereum & Co, he became a multi-billionaire. He was ranked high on the Bloomberg Wealth Index. Just yesterday, his shares in FTX and Alameda Research were valued at $6.2 and $7.4 billion. Meanwhile, SBF is no longer in the list of the 500 richest people in the world, while FTX and Alameda are now only valued at a token dollar.

The crypto industry, however, has lost much more than a multi-billionaire. For her, this is a further loss of considerable confidence. Once again, it has been proven that nothing is learned from the mistakes of the long-established financial industry.

The greed for getting rich quick is too great and no one knows who will be hit next. In May, SBF was still in discussions to save companies that had been on the brink of the collapse of , only to be liquidated itself six months later.

By Marco Oehrl



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