Can you believe the writers of this show? What a timeline.. and now Bitcoin has hit a new yearly low of below $17k as we tally the fallout from this historic fall from grace.
This FTX implosion will have so many repercussions. Faith and trust has been shaken, U.S. regulators are watching and the FTX/Binance deal has already begun to draw concerns of antitrust retaliation - a merger would account for an 80% share of the global crypto market. Then there’s the scenario where Binance backs out of the deal for FTX and no one else acquires it.. Users would likely face a long road and only be able to recoup a fraction of their funds.
Uncertainty currently reigns supreme. Not to mention tomorrow’s CPI which is expected to increase by 0.6% for October, to a year-over-year change of 7.9% and usually offers volatility. Crypto is in for some hard roads. Stay safe.
Tl;dr:
- Tallying the FTX damage:
- Tether, Coinbase, Circle, Genesis, Crypto.com, Cumberland, Deribit, Solana Labs limited exposure
- Multicoin Capital has 10% of fund's AUM stuck on FTX
- Galaxy Digital has a $76.8M exposure to FTX
- Wintermute has funds stuck on FTX but within its risk tolerances
- Amber Group has no exposure to Alameda or FTT but 10% of capital on FTX
- Most of FTX legal and compliance teams have quit
- $1B of SOL, 13% of supply, will soon be unlocked and released onto the market
- Huobi and Tron DAO to exchange Tron tokens at 1:1 if FTX withdrawals fail
- Binance + other exchanges to introduce Merkle-tree proof of reserves for full transparency
- FTX CEO lost an estimated $14.6B dollars – nearly 94% of his net worth
- FTX.us and Binance.us are two separate companies and are not currently impacted by the deal
- Binance tops up Secure Asset Fund for Users (SAFU) to an equivalent of $1B
- SBF’s priority crypto bill ‘dead’ after FTX sells to Binance
- Solend is facing the risk of accruing bad debt
- Meta cuts 11,000 jobs, 13% of its workforce
- ETH tuns deflationary 55 days after The Merge
- Metamask users can now bridge across multiple blockchain networks using MetaMask Bridges
- STEPN partners with ASICS and Solana
- Kim Kardashian and boxer Floyd Mayweather set to win EthereumMax lawsuit
- U.S. Treasury Department updates Tornado Cash sanctions over North Korea nuclear weapons
Now for a more expanded and detailed look at the day…
⛓ Crypto News:
- As the crypto industry looks for further contagion from FTX, Tether CTO Paolo Ardoino said the world's largest stablecoin issuer has no exposure to FTX or its sister firm Alameda Research after the crypto exchange was forced into a merger with rival Binance. Coinbase CEO also reaffirmed that they don’t have 'any material exposure' to the FTX/Aladema. Circle, Genesis, Crypto.com, Cumberland, Deribit, Solana Labs also distance themselves from FTX crisis. Galaxy Digital has a $76.8M exposure to FTX, of which $47.5M is currently in the withdrawal process. Crypto market maker Wintermute has funds stuck on FTX, but that they are within its risk tolerances. Multicoin Capital, one of the top crypto-focused venture capital firms, is significantly impacted with 10% of its fund's AUM stuck on the exchange. Amber Group has no exposure to Alameda or FTT, but it has been an active trading participant on FTX and less than 10% of total trading capital is tied up in the exchange
- BlockFi, which was set to potentially be acquired by FTX, says it is an independent entity following Binance’s acquisition announcement and that their products are currently fully functional
- The prices of coins associated with SBF - known as “Sam coins” - such as Solana, FTT and Serum have dropped far more than the rest of the market. In its second-largest token unlock, Solana tokens worth nearly $1B, 13% of the coin’s circulating supply, will be unlocked
- Meta cuts 11,000 jobs, 13% of its workforce
- Ether officially turned deflationary 55 days after The Merge
- Copper, an institution-grade crypto infrastructure provider, has $500M of insurance for digital assets in cold storage. The cover uses a panel of specialty insurer Canopius-led insurers and was arranged by Aon, a professional services firm
- The Middle East, Africa & Asia Crypto & Blockchain Association (MEAACBA) has been launched within Abu Dhabi’s free economic zone that aims to further the development of blockchain and crypto ecosystems
👨⚖️ Economic/Government/Regulatory:
- Binance-FTX deal may attract antitrust regulators’ attention. The combined company would have a more than 80% share of the global crypto market
- Sam Bankman-Fried’s priority crypto bill ‘dead’ after FTX sells to Binance
- Kim Kardashian and boxer Floyd Mayweather are set to win a lawsuit accusing them of scamming investors with the obscure cryptocurrency EthereumMax
- The U.S. Treasury Department updated its sanctions on Ethereum coin mixer Tornado Cash, citing its role in North Korea’s nuclear weapons program
💸 Exchange News:
- FTX.us and Binance.us are two separate companies and are not currently impacted by the deal. FTX.us’s withdrawals are and have been live, are fully backed 1:1, and operating normally
- Huobi and Tron DAO promise to exchange Tron tokens (TRX, BTT, JST, SUN, HT) at 1:1 if FTX withdrawals fail
- Crypto.com suspends deposits and withdrawals of USDC and USDT on the Solana blockchain
- Singapore’s state investor Temasek is engaging with FTX in its capacity as a shareholder in the wake of Binance’s bailout plan
- Sam Bankman-Fried no longer ranks in the top 500 on Bloomberg’s billionaire index - estimated 94% plummet in his personal, an estimated $14.6B
- Binance will soon introduce Merkle-tree proof of reserves, in the interest of full transparency - says the industry can’t simply say, "Trust me, bro." Justin Sun/Huobi Bitget also said that they will publish reserve certificates. OKX also plans to publish the auditable merkle tree proof-of-reserves or POF in the coming weeks (within 30 days)
- Binance has topped up its Secure Asset Fund for Users (SAFU) to an equivalent of $1B
- Cathie Wood's Ark Invest buys another $21.4M in Coinbase stock
🏦 DeFi News:
- Solend is facing the risk of accruing bad debt due to a large lending position that’s now underwater - the large loan is being liquidated slowly due to network congestion
- Metamask users can now bridge across multiple blockchain networks using MetaMask Bridges, which aggregates different blockchain bridges in one place
🖼 NFT/Gaming/Metaverse News:
- Binance has agreed to purchase FTX however the deal on FTX’s many NFT and gaming initiatives remains unclear
- STEPN partners with ASICS and Solana, pioneering a new era of Web3 fitness - launch of the new ASICS X SOLANA UI Collection featuring custom-made GT-2000 running shoes includes a token gated experience
💰 Fundraises:
- Japanese mobile operator NTT Docomo plans to invest up to ¥600B ($4.1B) over several years to focus on web3 technology
- Blockchain-based intelligence company TRM Labs announced a $70M expansion to its Series B funding round, bringing the total raised to $130M. Led by Thoma Bravo, with Goldman Sachs and previous TRM investors PayPal Ventures, Amex Ventures and Citi Ventures participating
- Crypto payments firm Ramp has raised $70M in Series B funding as its valuation increases to at least $450M co-led by the investment arm of Abu Dhabi-based sovereign wealth fund Mudabala Capital and venture firm Korelya Capital
- Fordefi, a financial technology and software company, raised an $18M seed round for the public launch of its institutional MPC wallet built for transacting on dApps. Led by Lightspeed Venture Partners, including Electric Capital, Alameda Research, Jump Crypto, Castle Island, Pantera Capital, Illuminate Financial, PayPal Alumni Fund, Nima Capital, Digital Currency Group, Defiance Capital and StarkWare
👶 Early Stage Projects:
- GammaSwap litepaper
📊 Data:
TL;DR: According to Arkham Intelligence, FTX has dropped to $1.6B in total balance. This comes after it topped at $22B last September and was up until the recent liquidity crunch ranging in the $7B-$8B region.
We can also see a huge spike in their losses, rivaling the market nuke last May
Then there’s Alameda Research - Also taken a big hit recently. Only $100M left…
🎓 Research/Reads:
- Why did FTX sell to Binance? What other obstacles are there? What are the implications for the future? - source
- Nansen’s on-chain metrics suggest several reasons why FTX decided to sell itself to Binance - source
- WuBlockchain - CEX Data Report in Oct.: Spot Volume Steady, Futures Volume Down Sharply - source
- Andre Cronje - Learn from my mistakes - source
- Messari - State of Boba Network Q3 2022 - source
🌍 Crypto Twitterverse:
Diving into the FTX/Binance saga through the lens of crypto twitter…
Clash of the Titans
Binance and FTX Ordeal Explained by Crypto Twitter
The Crypto world has been absolutely floored by recent events...
What seemingly started as some Twitter drama between the billionaire CEOs of two of the world’s largest crypto exchanges...
🤯🧵🔥
— The Crypto Illuminati (@0x_illuminati)
Nov 9, 2022
Intern notes on the biggest @UpOnlyTV stream of all time:
- FTX 🫡
- What’s happening ⁉️
- Do Kwon appearance 🌗And infinitely more
@cobie <> @ledgerstatus <> @stablekwon <> Martin Shkreli <> @jimtalbot <> @gainzy222 <> @EvgenyGaevoy
— CMS intern (@cmsintern)
Nov 8, 2022
In the spirit of transparency, might as well share the actual note, sent to all Binance team globally a few hours ago.
— CZ 🔶 Binance (@cz_binance)
Nov 9, 2022
Here's the 30 second summary of the FTX drama that is blowing up in crypto.
1/ How FTX (a multi billion dollar co) almost died overnight
2/ And why this is a god tier strategic move by @cz_binance
— Shaan Puri (@ShaanVP)
Nov 8, 2022
History doesn't repeat, but it often rhymes.
2023 in macro might look a lot like 2001 - here is why and what it implies for markets.
A thread.
1/
— Alf (@MacroAlf)
Nov 8, 2022
1/ I found evidence that FTX might have provided a massive bailout for Alameda in Q2 which now came back to haunt them.
40 days ago, 173 million FTT tokens worth over 4B USD became active on-chain.
A rabbit hole appeared 🧵👇
— Lucas Nuzzi (@LucasNuzzi)
Nov 8, 2022
There I was, surfing the wave of waves, next moment wiped out, board broken, rocks reefs everywhere
The sudden pain of business failure and loss of purpose, as a golden child of the industry + biz cycle more broadly, was as difficult as the ensuing ostracization and demonization
— Zhu Su 🔺 (@zhusu)
Nov 9, 2022
mentally FTX equity and FTT are worth essentially $0 in my mind, perhaps some very tiny residual value from the US entity where user funds allegedly is still 1:1 (while intl platform was not lol)
if users have to take a haircut on deposits, their investors are going to see -100% twitter.com/Dogetoshi/stat…
— 찌 G 跻 じ MBA, CFA, FRM, CFP, NGMI, HFSP, HENTAI (@DegenSpartan)
Nov 9, 2022
It won't be long before regulatory requirements for centralized crypto companies to keep customer funds in segregated accounts in a bankruptcy-proof manner prohibiting their use for the company's own accounts are the global standard.
Coming to the EU with MiCA soon.
— Patrick Hansen (@paddi_hansen)
Nov 9, 2022
1/ Alameda previously borrowed hundreds of millions of $ from DeFi
Now they are facing a liquidity crunch (or worse), putting their unsecured creditors at risk
Here's what their DeFi debt obligations are now 🧵
— RWA.xyz (@rwa_xyz)
Nov 8, 2022
1/ FTX liquidity crunch in 10 charts:
• Asset withdrawals
• Outflow destinations
• Liquidationsand more 🧵
— Ignas | DeFi Research (@DefiIgnas)
Nov 9, 2022
The reason why we're seeing so many liquidations & bankruptcies in #crypto this yr is not due to the industry but due to old behavioral patterns from TradFi where companies were used to bailouts in times of trouble
All of this short-term pain is great in the long run
THREAD 🧵
— JACKIS (@i_am_jackis)
Nov 9, 2022
The scary part [to me] isnt near term bank runs or price going down, its that the long term legitimacy of crypto as an industry is in real danger for the first time
— Sisyphus (@0xSisyphus)
Nov 9, 2022