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The Seven Days that Rocked The Crypto World
(Originally posted on : Crypto News – iGaming.org )
Even for someone who has owned cryptocurrencies for a decade, the past week has been extraordinary. Sentiment in the crypto market was neutral and even equally hopeful when Bitcoin was worth 21 thousand euros. Then, out of nowhere, FTX dragged all cryptocurrencies into the abyss.
Troubled Crypto History
Bitcoin is less than 14 years old, and a crypto market like ours is less than 10 years old. But there are some events that no one can resist. In 2013, the online marketplace Silk Road was blown up by the FBI, followed by the hack of cryptocurrency exchange Mt. Gox in 2014.
In 2016, Decentralized Autonomous Organization (DAO) smart contracts were hacked, leading to the separation of Ethereum Classic from Ethereum. A year later, it was Bitcoin’s turn, and in August 2017, the blockchain split in two and Bitcoin Cash was born.
This year we have experienced two important and unforgettable moments. In May, we saw the downfall of Terra Luna and the cryptocurrency exchange FTX this week. The difference is that the operator of FTX was well-connected in the political world and went on to become a selfless billionaire.
The crypto world is moving fast and our memories sometimes fail, so a summary and overview of last week’s events.
Sunday, November 6: Binance sells FTT
On Wednesday, Nov. 2, CoinDesk released an analysis of Alameda Research’s troubles balance sheet backed up by only FTT. Consequentialy, on Sunday, November 6, Binance CEO Changpeng Zhao tweeted that they would start to sell all of FTX’s tokens.
Alameda CEO Caroline Ellison said CoinDesk’s filing was incomplete:
Monday, November 7: No problem
Sam Bankman-Fried, CEO of FTX, said there was nothing wrong with his stock market and said that competitors were trying to catch the exchange with false rumours. “FTX is good”, Bankman-Fried confirmed saying that FTX had enough to cover all client positions, that they has processed all withdrawals and would continue doing so.
Monday was marked by a dispute between Binance and FTX. The market sentiment dropped and resulted in the price of FTT beginning to drop significantly.
Tuesday, November 8: Binance wants to buy FTX
Binance saw FTX in trouble and tried to save the company by announcing it would take over FTX to beat the competition.
Bankman-Fried said FTX has agreed to an acquisition agreement with Binance for FTX’s operations outside the U.S.
“Our teams are working on clearing out the withdrawal backlog as is,” he tweeted. “This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that.”
Wednesday, November 9: Binance-FTX Deal cancelled
Binance saw the ledger and the numbers and thought: We don’t want anything to do with this. FTT price drops 80%, Bitcoin falls below $18,000.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said in a statement.
Bloomberg writes that the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) are investigating FTX. These are the two U.S. government agencies that regulate the market.
Thursday, November 10: Sorry
On Thursday, Bankman-Fried apologized on Twitter. ‘I’m Sorry. That’s the biggest thing,” he said in a tweet. “I fucked up and should have done better. ”
The CEO added that the company is doing everything possible to improve liquidity and that the combined market value of the global firm’s assets and collateral exceeds customer deposits.
Bankman-Fried added that Alameda Research will exit the deal. The Wall Street Journal, citing investor conversations, reported that FTX has lent about $10 billion to Alameda Research.
Reuters wrote that Bankman-Fried did not notify other executives of the transfer of funds to Alameda. Tether has been ordered by the government to freeze $46 million from FTX.
In addition, there are signs that FTX US may also be in trouble, contrary to what the CEO has previously said, that the activities of the international and U.S. branches are being separated.
Friday, November 11: FTX files for bankruptcy
The FTX saga came to a head on Friday, when FTX and more than 100 companies, including those associated with FTX US, filed for bankruptcy protection.
Saturday, November 12: FTX hacks claims
After a long week, it’s finally Saturday and FTX claims to have been hacked. Rumors go around that FTX insiders are responsible and finding a safe exit with funds.
Sunday, November 13: Criminal Investigations into FTX
Reports of the fallen crypto exchange being under investigation quickly spread, In the Bahamas, where FTX was headquartered, regulatory task forces are closing in on Bankman-Fried and his platform.