It’s a bloodbath out there, and there’s no way to make it sound any better than that.
If you want to know what the heck happened with FTX ($FTT.X), read yesterday’s quick post that highlighted what happened.
In a nutshell, CZ’s weekend Tweet send the FTT token into a death spiral, with customers basically performing a run-on-the-bank. FTX couldn’t keep up and got behind and needed a bailout – that’s where Binance comes in.
You’d think that FTT might get a bit of a recovery if Binance is interested in buying them out, right? Nope, that didn’t and isn’t happening.
Before the normal market close, the nail in the coffin for FTT hit home when news broke that Binance is not acquiring FTX.
Let’s take a look at everything that has gone down today:
- Bloomberg reported at 11:11 AM EST that SEC and CFTC are scrutinizing FTX’s relationship with FTX.US.
- SEC probe into FTX cited as one reason Binance walked. Regulators are investigating whether FTX.com mishandled customer funds.
- Two company sites that are part of SBF’s empire have gone dark: FTX Ventures and Alameda Research.
- Reports start coming in that FTX was denied $1 billion in emergency funding from Wall Street and Silicon Valley entities before ultimately reaching out to Binance.
- Another report from Semafor reported that FTX’s legal and compliance staff quit.
Even CZ seems exasperated by it all:
Sad day. Tried, but 😭
— CZ 🔶 Binance (@cz_binance) November 9, 2022
Investors and traders alike are understandably afraid that if FTX wasn’t safe – which exchanges are? One method of showing transparency and trust is the Proof-of-Reserves protocol.
Proof-of-Reserves is a public audit by a third-party accounting firm to show that customer deposits/funds/crypto are held and safe and records are accurate.
Today, crypto exchanges OkX and KuCoin Tweeted they are beginning the process of showing Proof-of-Reserves, with OkX announcing their report in the next 30 days.
This is a major news event that continues to change, we’ll keep you updated as events unfold.