The ongoing FTX/Alameda implosion saga has entered another day and things are getting real out there... Lots of people are hurting and the contagion is only just beginning. Whatever happens next, we’re recording all the details in a timeline fashion so make sure to follow along as we track this historic event. Worrying things to keep in mind - deleveraging during the fallout and a cascade of margin calls due to the close relationship between FTX, Alameda Research and the rest of the crypto ecosystem. The implications of this gargantuan event are most likely only just beginning. Stay strong and reach out if you need to talk.
FTX Day 4 tl;dr:
Events:
- Binance will not buy FTX after reviewing the company's financials
- FTX would need to file for bankruptcy without a cash injection - top priority is fundraising
- DoJ and SEC are working together to investigate FTX U.S
- It took a grossly irresponsible amount of time before FTX closed customer deposits
- SBF transferred at least $4B to Alameda after suffering losses in May and June
- Alameda owes FTX about $10B
- Alameda Trading is winding down
- Justin Sun working with FTX to protect Tron users with funds stuck on FTX at a 1:1 ratio
- Tether freezes $46M USDT on the Tron blockchain following a request from law enforcement
- FTX approached U.S.-based crypto exchange Kraken about a potential rescue deal
- Binance hot and cold wallets holds a total of ~ $70B
- Japan's financial regulators have ordered FTX's Japan arm to suspend operations
- Crypto.com, OKX and Kucoin, BitMEX providing proof of reserves & proof of liabilities
- Tether begins to depeg. The Tron DAO Reserve will purchase 1B USDT to fight short sellers
- Curve's 3pool imbalanced - USDT accounting for ~ 80% of the pool's liquidity
- FTX begun processing withdrawals again following a more than 48-hour shutdown
- SBF seeking up to $9.4B for FTX's rescue
Entities & Casualties Status:
- Sequoia FTX investment now worthless ~ $213.5M in losses but fund is still in good shape
- Nexo currently has net zero exposure to FTX and Alameda Research
- Kraken had no exposure to Alameda Research - only holds ~ 9,000 FTT
- Genesis Trading reported losses of ~ $7M
- GSR will cover client losses from FTX collapse
- Hodlnaut held assets worth $13.1M on FTX
- El Salvador's president Nayib Bukele denies country had any funds on FTX
Now for a more expanded and detailed look at the day…
⛓ Crypto News:
- Binance will not buy FTX after reviewing the company's financials. SBF told investors that the company would need to file for bankruptcy without a cash injection and that the top priority is to conduct a fundraise. Alameda Trading is winding down. Alameda owes FTX about $10B. FTX has approached U.S.-based crypto exchange Kraken about a potential rescue deal. FTX begun processing withdrawals again following a more than 48-hour shutdown
- SBF transferred at least $4B to prop up sister company Alameda Research after suffering losses from deals in May and June. A portion of these FTX funds were customer deposits
- On the brightside, US CPI came in lower than expectations - fell to 7.7%: 7.7% YoY, 0.4% MoM Expected: 7.9% YoY, 0.6% | MoM US CPI Core: 6.3% YoY, 0.3% MoM Expected: 6.5% YoY, 0.5% MoM
- Bitcoin falls under $16,000 for the first time since November 2020 - hitting a 2 year low
- Justin Sun is working on solution with FTX - will protect Tron users with funds stuck on FTX at a 1:1 ratio
- Tether has frozen $46M of USDT on the Tron blockchain following a request from law enforcement
- Worrying things: deleveraging during the fallout, cascade of margin calls due to the close relationship between FTX and Alameda Research and the rest of the crypto ecosystem
- Sequoia says its investment in FTX is now worthless with losses totaling $213.5M and that the fund is still in good shape
- Crypto lender Nexo currently has net zero exposure to FTX and Alameda Research - they withdrew its entire balance of funds from FTX within the past few days
- Crypto trading firm GSR will cover client losses from FTX collapse, will no longer trade on Huobi and "manageable exposure" to FTX following the crypto exchange's collapse
- Kraken said it has no exposure to Alameda Research, but that it holds around 9,000 FTT
- European crypto asset trading and investment group CoinShares disclosed $30.3M currently stuck on FTX. This is roughly equivalent to 11% of its net asset value
- No Aptos Labs or Aptos Foundation treasury is held by FTX
- Lender Genesis Trading reported losses of about $7M after it hedged and sold collateral in anticipation of extreme market volatility
- Troubled crypto lender Hodlnaut held assets worth $13.1M on FTX. Unclear whether Hodlnaut’s managers moved funds away from FTX before operations were halted
- Starknet new governance organization called the Starknet Foundation - will lead grants and funding for new Starknet protocols and aim to create standards that align with Ethereum’s decentralization and open source standards
- Layer 1 blockchain startup Aptos partnered with Google Cloud in a move that will see the search giant power some of its validator nodes, among other services
- Data warehousing platform Space and Time has joined chipmaker Nvidia's startup program just over a month after raising a $20M strategic funding round backed by Microsoft’s venture arm M12
- Shell, one of the world’s largest oil and gas companies, has signed a two-year partnership with Bitcoin Magazine to sponsor the 2023 and 2024 Bitcoin Conferences
👨⚖️ Economic/Government/Regulatory:
- The Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) are working together to investigate FTX’s U.S.
💸 Exchange News:
- Binance list of hot and cold wallets reveal: total of around $70B is held in BUSD, USDT, BNB, BTC, ETH & USDC
- Bitmex, which claims no FTX or Alameda exposure, plans to launch its native token regardless of market volatility amid the collapse of FTX. No material exposure to FTX's native token or any other tokens issued by centralized exchanges
- El Salvador's president Nayib Bukele, who denied that the Central American country had any funds on FTX's exchange
- FTX has suspended new users from signing up on its trading platform following widespread criticism that was allowing onboarding despite facing liquidity troubles
- Japan's financial regulators have ordered FTX's Japan arm to suspend operations in the country
- Crypto.com commits to proof-of-reserves after halting certain deposits and withdrawals. OKX and Kucoin say proof of reserves will be ready in a month. BitMEX provides snapshot update to bitcoin proof of reserves & proof of liabilities
- OKX will regularly delist contracts with poor liquidity in order to prevent market risks such as BTT, SC, WNXM, SOS, ASTR, and NYM
🏦 DeFi News:
- Tether dominance nears all-time high as crypto crashes however has fallen 1% below its peg. The Tron DAO Reserve will purchase 1B USDT to fight short sellers
- Curve's 3pool, one of the most important pools for stablecoins in DeFi, is heavily imbalanced - USDT accounting for 80% of the pool's liquidity
- Solana plan to unstake has now been postponed, and all 28.5M SOL have now been re-staked
- dYdX placed Solana trades in “close only” mode, meaning users will only be able to close out their positions on the perpetuals exchange and not open new ones citing market volatility
- Solend has accrued a bad debt of more than $6M from a large underwater position
- The Tron network's algorithmic stablecoin USDD has begun to depeg - fell to as low as 96 cents
- Debank - "Time Machine" - help you look back your complete portfolio details (not just the total net worth number) from any day in history
🖼 NFT/Gaming/Metaverse News:
- OpenSea will continue to enforce creator royalties on NFTs following significant pushback from the community
- Soccer star Lionel Messi is joining Sorare, the French NFT trading game, as an investor and brand ambassador
- Streetwear brand The Hundreds has canceled a planned NFT drop on OpenSea due to the marketplace’s stance on creator royalties. Many notable Web3 creators are stepping up their pushback
- Wuhan omits NFTs from metaverse plan amid regulatory uncertainty in China
💰 Fundraises:
- Web3 messaging infrastructure Notifi raises $10M seed round co-led by Hashed, Race Capital
- Anything World raises $7.5M to assist content creators using AI-based animation - investors include Acrew Capital, Alumni Ventures and Warner Music Group
- The company behind Icons of Theia, Theia Studios secures $2.4M to create a decentralized modding platform intended to revolutionize strategy games
👶 Early Stage Projects:
- 12 Projects selected for Season 5 of Binance Labs Incubation Program, spanning infrastructure, zkDID, DeFi, tooling, security, gaming, and payment sectors
📊 Data:
TL;DR: Over the past 7 days, Smart Money has been sending FTT onto exchanges and removing stables, Bitcoin and ETH. Meanwhile all wallets have been sending primarily GUSD, FTT, TUSD, cbETH to exchanges and withdrawing stables ETH and Bitcoin in large amounts
Exchange Flows:
Smart Money Exchange Inflow:
Smart Money Exchange Outflow:
All Wallets Exchange Inflow:
All Wallets Exchange Outflow:
🎓 Research/Reads:
- A Letter from KuCoin CEO - source
- Where do we go from here? The crypto endgame is here (or is it?) - what do? - source
🌍 Crypto Twitterverse:
1) I'm sorry. That's the biggest thing.
I fucked up, and should have done better.
— SBF (@SBF_FTX)
Nov 10, 2022
1/ One of the most challenging and unspoken issue facing the @solana ecosystem are the wrapped Sollet tokens, namely soBTC, which is used widely across lending and AMM platforms.
The problem? These tokens are issued by FTX (or Alameda, no one really knows)
— meow (@weremeow)
Nov 9, 2022
If I had to guess, it was widely known alameda had been internalizing (take other side) ftx client liquidations for years
3 days of 99% sell-only liq flow from Luna1 (and many other coins) likely wouldve opened up a large loss from giving themselves non-liq on their own platform
— Zhu Su 🔺 (@zhusu)
Nov 10, 2022
This reads like a parody, but it’s on the Sequoia website. What a joke sequoiacap.com/article/sam-ba…
— tae kim (@firstadopter)
Nov 9, 2022
FTX investors:
BlackRock
Ontario Pension Fund
Sequoia
Paradigm
Tiger Global
SoftBank
Circle
Ribbit
Alan Howard
Multicoin
VanEck
Temasek— Frank Chaparro (@fintechfrank)
Nov 9, 2022
📢 FTX Contagion List:
Contagion from @FTX_Official is spreading like a cancer across the crypto space. Like cancer, the hardest part is the not knowing, the waiting, the fear of what you might find out. After we lay all the facts bare, we can capitulate, crab & move on.
🧵👇— CryptoCondom (@crypto_condom)
Nov 10, 2022
1/
What happens now that Baron CZ passed on FTX bailout and SBF is bankrupt. The next question is who could save FTX?— Arthur Hayes (@CryptoHayes)
Nov 9, 2022
appreciate that finally there's some proper communicate with users
however, call me unconvinced with the phrasing of "total market value of assets/collateral higher than client deposits"
since it means "realizable value to convert the crap to 1:1 client assets will be short" twitter.com/SBF_FTX/status…
— 찌 G 跻 じ MBA, CFA, FRM, CFP, NGMI, HFSP, HENTAI (@DegenSpartan)
Nov 10, 2022
SBF will be facing up to serious financial crimes.
He has already perjured himself in front of lawmakers.
He has no incentive to tell the truth here.
I wouldn’t believe a word he says. twitter.com/SBF_FTX/status…
— Aylo (@alpha_pls)
Nov 10, 2022
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