A week-long crash trip amid the crypto chaos

FTX: From Binance's Possible Acquisition to Bankruptcy

Cryptocurrency exchanges experienced a resounding crisis this week, with the filing of bankruptcy for the FTX platform and the announcement of its CEO, Sam Bankman-Fried, that he was resigning, along with the liquidation of nearly 130 of its subsidiaries around the world, in a dramatic development of what may be one of the biggest crashes in the currency market. encrypted.

This rapid collapse of “FTX”, which is considered one of the major cryptocurrency trading platforms, came in light of a severe liquidity crisis with dealers frantically withdrawing for fear of bankruptcy, in addition to the decline of the “Binance” exchange from buying the platform with ambiguity about the fate of $8 billion. .

Binance announced that it would not proceed with the acquisition of the operations of its competitor, FTX, and attributed the largest platform in the world to the process of due diligence and press reports regarding the mismanagement of customer funds with FTX.

According to data from CoinGeco, which is concerned with cryptocurrency analytics and data in the world, Binance is the largest cryptocurrency trading platform in the world in terms of volume, while FTX is among the top five.

And the “Binance” cryptocurrency trading company had previously signed a non-binding letter of intent to acquire most of the operations of the “FTX” platform to cover the liquidity crisis that the latter is going through, according to what Changping Zhao, CEO of Binance, said last Tuesday in a tweet on his page with “Binance.” Twitter".

Zhao said FTX had asked for help with a major cash crunch.

To protect users, we have signed a non-binding Letter of Intent, with the goal of acquiring all of FTX and helping to cover the liquidity crunch.

Zhao said, in a statement posted on his Twitter account on Wednesday, that he had asked his company to stop trading the FTT token, the currency of FTX, and advised users not to trade it.

Zhao said that what happened to "FTX" severely shaken consumer confidence, that lawmakers will increase scrutiny of trading operations, and that it will be more difficult to obtain licenses around the world.

On the same day the instructions were issued, the FTX platform's currency, FTT, fell by more than 75% in a single day, according to data from cryptocurrency specialist CoinDesk.

FTX had seen withdrawals of $6 billion in the 72 hours prior to Tuesday morning, with investors worried about the possibility of contagion from FTX’s liquidity crisis to other platforms. The cryptocurrency market witnessed sharp losses and its market value plummeted. below $850 billion.

The crisis extended until the cryptocurrency exchange "FTX" reported that it would start bankruptcy protection procedures in the United States after its CEO Sam Bankman-Fried resigned.

The collapse of FTX is a stunning reversal in the fortunes of the company and its founder Sam Bankman-Fried, who until recently was hailed as a "white knight" and lost about 94 percent of his fortune, dropping from $15.6 billion to $991.5 million.

It also raises questions about the future of smaller companies such as Block V and bankrupt crypto lender Voyager Digital, which signed bailout packages with FTX after the spectacular collapse of TerraUSD last May that drove many companies to the brink of collapse.

FTX was looking for a lifeline after a liquidity crunch as clients were withdrawing funds at a frantic pace.

It also raises concerns about the future of the cryptocurrency industry as a whole, which faces the daunting task of restoring preference among retail investors.

The attorney who settled Enron's bankruptcy will take over as CEO of the company.

The platform also announced the liquidation of nearly 130 of its subsidiaries around the world, according to the Financial Times.

The announcement, posted on the company's Twitter account, comes days after top rival Binance withdrew from a proposed takeover deal and left FTX struggling to raise $9.4 billion from investors and competitors.

The company said that Bankman-Fried's Alameda Research business is also part of the bankruptcy protection.

The sources said that this was partly behind FTX's problems, and it is said to owe about $10 billion to FTX.

witnessed sharp declines in the market value, especially for the leading cryptocurrencies, and this comes with a mass flight of small investors seeking to reduce their losses.

The repercussions of the bankruptcy of the “FTX” stock exchange, which reached a market value of more than 32 billion dollars, dominated the volatility of this week, which is one of the worst periods for cryptocurrency investors ever, with its market value reaching a level below a trillion dollars for the first time since the beginning of 2021 Amid sharp exits and selling, regardless of the losses.

The market value of cryptocurrencies fell to the level of 885 billion dollars, but it is 73% less compared to the historical peak recorded in November 2021, which amounted to three trillion dollars, and Bitcoin, the largest cryptocurrency by market value, fell by more than 18% during the days The last five, recorded the level of 15.5 thousand dollars.

Currently, the "FTX" platform is subject to US investigations about suspicions of manipulating the balances of dealers in speculative operations and risky bets, with the disappearance of $8 billion of those balances.

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