FTX created FTT tokens out of thin air and exchanged them for cash with depositors which he then loaned to his Hedge Fund to invest w/ FTT tokens put up as collateral . Its a brilliant dollar harvesting program.
If not for a run by depositors it could hv continued
CZ dropped a bombshell on Twitter: Binance would sell off its entire FTT holding. He claimed the intention was to sell “in a way that minimizes market impact,” but the announcement led to a steep drop in the price of FTT (the token has lost almost 90 percent of its value) and a surge in withdrawals at FTX as customers began to panic about the safety of their crypto.
https://www.wired.com/story/ftx-collapse-binance-crypto-deal/
Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software. Binance was initially based in China, but later moved its headquarters out of China shortly before the Chinese government imposed regulations on cryptocurrency trading.
In 2021, Binance was put under investigation by both the United States Department of Justice and Internal Revenue Service on allegations of money laundering and tax offenses.The UK's Financial Conduct Authority ordered Binance to stop all regulated activity in the United Kingdom in June 2021.[9]
In 2021, Binance shared client data, including names and addresses, with the Russian government.
https://en.m.wikipedia.org/wiki/Binance
Binance Holdings Ltd., the world’s largest cryptocurrency exchange, confirmed that it’s an equity investor in Elon Musk’s $44 billion acquisition of Twitter Inc.
Binance Invests $500 Million in Musk's Twitter Takeover
https://www.investopedia.com/binance-invests-in-twitter-6822895
An interesting take on Crypto Markets that I completely agree with
Market capitalization isn’t real. It’s a notional value representing the maximum value of all the existing units of an instrument if you could sell them at the current bid. But you never can. When the entirety of an issue goes up for sale, there is, for a single moment, not a single buyer. And then the price drops by a lot.
All of the value inside the crypto system is imaginary and all the money that has been traded in crypto markets are just dollar credits and debits inside the old guys’ financial system.
There is no inherent value in crypto, only the net value on exit.
And if you control the dollar/fiat system, you face a choice whether to allow a blending of the two systems or to keep crypto in a box and kill it by blocking the exits.
It’s a large pile of useless tokens leveraged by people with unlimited borrow. And whatever new money is coming in to bid them up even more.
Crypto people think real wealth creation has happened.
Trad finance guys think the crypto people bid up a bunch of magic beans inside a closed system and when they run for the exits, finance needs to slam the door in their face.
There is no spoon. When a market goes bidless, there is no market.
And at a time when dollar liquidity is being drained worldwide, if you think crypto is going to moon, you may be a tad disappointed.
https://www.zerohedge.com/crypto/alt-take-ftx-what-if-it-was-built
Exactly a year ago, in November 2021, during peak crypto craziness, the market cap of all of the many thousands of crypto tokens combined, from bitcoin on down, hit $3 trillion globally. Today, the market cap is at about $850 billion, so that’s down by 72%. In other words, $2.1 trillion have vanished in 12 months.
FTX had a valuation of $32 billion at its peak in 2021….[but by March of 2022 it dropped to $14 billion and much of the summer it hovered around $10 billion]
These investors include well-known names, such as Sequoia Capital, SoftBank, Lightspeed, BlackRock, and a bunch of others. Their investments in FTX have vanished.
All this is minor stuff compared to a big stock such as Meta plunging 70% or Tesla plunging 50%. Tesla’s drop alone wiped out $620 billion. Amazon’s drop wiped out something like $800 billion.
At one point, cryptos had a market cap of $3 trillion, now it’s down to $850 billion, over two-thirds has already vanished, and outside of the crypto zone – beyond all the mess and chaos in the crypto zone – the crypto implosion has been orderly. Really no big deal.
It was easy-come-easy-go money, much of it hadn’t been converted into fiat yet, hadn’t made its way to bank accounts yet. And for a lot of people, it was the gains that evaporated, more than their own capital.
The US stock markets are around $40 trillion. The cryptos never amounted to one-tenth of that. Two-thirds of the losses are now already behind us. And the remainder of crypto, what’s left of it, just amounts to 2% of the stock market. If that remnant too goes away, like goes to zero, people outside the crypto zone won’t even notice – that remaining $850 billion on a global scale is just too small.
https://www.nakedcapitalism.com/2022/11/wheres-the-contagion-from-the-crypto-implosion.html
So I really dont get the excitement over FTX demise. Crypto has been a trainwreck in slow motion for a year. Perhaps because it was so blatant and politicized. I mean. SBF gave money to the Democrats!. Thats enough to get some excited enough to cheer about their collapse. And truth be told, I am weeping no tears for the crypto bugs looking for a big profit and FTX big investors, nor the sleazy executives running FTX and Alameda and its founder SBF. But some of that stolen Money was given to Republicans too
According to data at the Federal Election Commission, Bankman-Fried sluiced $36 million on the campaign coffers of Democrats during the latest campaign cycle. Ryan Salame, the Co-CEO of FTX Digital Markets, the Bahamian subsidiary of FTX, dumped $23 million into the campaign coffers of Republicans and a Super PAC he created to support them, American Dream Federal Action.
American Dream Federal Action is a hybrid PAC with a mission to back “forward-looking” Republicans who will “protect America’s long term economic and national security by advancing smart policy decisions now,” its website says.
As a hybrid PAC, or “Carey committee,” the group can function both as a super PAC,raising unlimited funds for independent expenditures, and as a traditional PAC, giving money to candidates directly. It is required to use distinct bank accounts for each purpose.
The group, which was formed under a different name in March and then changed its name in April, must report its independent expenditures and donors to the Federal Election Commission.
American Dream Federal Action says it prioritizes pandemic preparedness. In an interview with the Washington Examiner, the group’s founder, Ryan Salame, stated, “Living through and going through COVID, it became abundantly clear that we’re not prepared for pandemics.”
Salame works with billionaire Sam Bankman-Fried, who is the primary funder of Protect Our Future PAC, a group that also emphasizes pandemic preparedness but instead backs Democratic candidates in House races. Salame is a co-CEO of FTX Digital Asset Markets, a subsidiary of Bankman-Fried’s cryptocurrency exchange, FTX. He previously worked for Alameda Research, a cryptocurrency trading firm founded by Bankman-Fried.
Before founding American Dream Federal Action, Salame donated $1.5 million to GMI PAC — a super PAC that supports both Republicans and Democrats “who work to give US-based innovators the opportunity to build next-generation technologies and services here in America rather than doing that valuable work overseas.”
As of Aug. 31, Salame has been American Dream Federal Action’s sole individual funder. The group has raised slightly over $15 million, all from its founder.
Thus far, American Dream Federal Action has spent about $12.6 million in independent expenditures, entirely in support of 15 Republican candidates in House and Senate races. The group has not made any direct contributions via its traditional PAC arm.
Only two of these candidates, Rep. Rodney Davis of Illinois and Matt Mowers of New Hampshire, did not advance to the general election.
The hybrid PAC also made headlines this fall for collectively spending about $3 million to support three Republicans — Katie Britt of Alabama and Bo Hines and Rep. Ted Budd, both of North Carolina — who were endorsed by Trump and have spoken outagainst COVID-19 restrictions in the past.
The group spent nearly $2 million to help Britt win the Republican nomination for U.S. Senate in Alabama. Britt, a former chief of staff to retiring Sen. Richard Shelby, supported COVID-19 vaccinations, but opposed government restrictions, such as mask mandates and government-imposed lockdowns.
https://www.factcheck.org/2022/10/american-dream-federal-action/
So enough politics.
I do think FTX was taken down for a reason, which is to get support for crypto regulation which will be a precursor to CBDC that the Fed is testing right now. The irony is that a Chinese founded company thats invested in Musks Twitter, used Twitter to start a run on FTX, which seems to interest nobody.