This is a huge surprise and the biggest consolidation action ever seen in the crypto-asset industry to date. Global cryptocurrency giant Binance has signed a letter of intent to acquire one of its major competitors, FTX. This action follows the risk of a serious liquidity crisis affecting the cryptocurrency exchange led by Sam Bankman-Fried. The latter, however, has been seen as one of the consolidating players in the market since last spring.
https://twitter.com/cz_binance/status/1590013613586411520?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet%7Ctwtr%5Etrue
Concerns about the FTX exchange began on Nov. 2, when CoinDesk published a financial document that revealed that one of Sam Bankman Fried’s companies, Alameda Research, holds a very large amount of FTT, the token for the FTX ecosystem, on its balance sheet. the exchange is also owned by Sam Bankman Freed. The publication blurred the lines between the two companies. Above all, Alameda was at risk if the FFT token fell in value.
Following this announcement, the head of Binance announced on Sunday its intention to get rid of all of its FTT tokens within a few months, an amount equivalent to $529 million that Binance was holding as part of the FTX capital exit. This announcement caused the price of FFT to plummet by 30%, sending FTX into turmoil.
Another crisis of confidence
The scenario in some sense recalled the disastrous example of Luna, this fund whose cryptocurrency terra collapsed last May and whose founder is now wanted by Interpol.
“Liquidating our position in FTT is simply a way to manage risk and learn from LunaChangpen Zhao said on Twitter in response to some critics who accused Binance of hastening the fall of the FTX token with its announcement.
On Monday, however, Sam Bankman-Fried noted that all of FTX’s assets are performing well. However, on Tuesday, the platform started freezing some withdrawals, raising doubts. Sam Bankman Fried admitted.Agreed on a strategic deal with Binance for FTX.com»
The surprise is all the greater because since the beginning of the cryptocurrency crisis, FTX and Alameda Research have become more like providers of bailout loans to players in trouble.
“These developments will not assuage the concerns of cryptocurrency investorswarns City Index analyst Fawad Razakzada.
Source: Le Figaro
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.