The Ongoing FTX and Binance Saga: Everything That Happened So Far

The Ongoing FTX and Binance Saga: Everything That Happened So Far

All dates are Coordinated Universal Time (UTC).

November 2 – Reports that the company founded by SBF held significant amounts of FTT

The saga began on Nov. 2 after reports that a leaked balance sheet from Sam Bankman-Fried-founded trading firm Alameda Research suggested the company held a significant amount of FTX Token (FTT), the native token of the FTX cryptocurrency exchange.

A large trading company holding so much of an asset has the crypto community concerned and raised questions regarding the relationship between Alameda and FTX.

November 5 – Trackers detect significant FTT movement to Binance

On November 5, Twitter account Whale Alert, which tracks major crypto movements on the chain, informed its users that nearly 23 million FTT worth over $584.5 million had been transferred to Binance.

At the time, the amount was worth around 17% of the circulating TTF supply.

Nov. 6 — Alameda CEO Explains Balance Sheet

Alameda CEO Caroline Ellison tried to quell any panic in a Nov. 6 tweet saying the leaked balance sheet didn’t tell the whole story and noted that the balance sheet, in particular, was only about a ” subset of our corporate entities” and other assets. worth more than $10 billion “are not included”.

November 6 – Binance decides to liquidate FTT holdings due to “recent revelations”

Later on Nov. 6, Binance CEO Changpeng “CZ” Zhao said his exchange would liquidate its entire FTT holdings, citing “recent revelations that have come to light” allegedly in reference to Alameda’s balance sheet. .

Zhao said Binance held approximately $2.1 billion equivalent in Binance USD (BUSD) and FTT due to its divestiture of FTX last year, but did not clarify Binance’s current FTT holdings.

He added that he would sell the tokens in a way that “minimizes the impact on the market”, expecting the token sales to take “a few months to complete”.

He also has confirmed the transfer of almost 23 million FTT on November 5 was part of Binance’s liquidation.

Zhao added later the move was “just post-release risk management” and referred to lessons learned from the collapse of Terra Luna Classic (LUC) and its impact on the market, instead of being caused by a fight on Twitter.

November 6 – Alameda CEO offers to buy Binance’s FTT holdings

Shortly after Zhao announced on Nov. 6 that his FTT position was being liquidated by Binance, Ellison tweeted at Zhao saying that Alameda would “happily buy anything” for $22 per share.

November 7 – FTX “bank-run” begins, exchange addresses slow withdrawals

With reports and rumors swirling, FTX users began withdrawing their funds from the exchange lest it go bankrupt, and commentators implored those who had not already done so to withdraw their crypto from FTX.

Reported Data from Nansen on Nov. 7 showed stablecoin outflows on FTX reached $451 million over seven days, and users began reporting slow withdrawals on FTX, with the exchange addressing withdrawal complaints assuring users that everything was going fine.

Nov. 7 – SBF says ‘assets are fine’, implores CZ to come together

Shortly after the exchange responded to user concerns, Bankman-Fried launched a series of tweets saying that a competitor is “trying to sue us with false rumors” and added that “FTX is fine. Assets are OK.

He claimed that the exchange had “enough to cover all client holdings”, that it was “not investing client assets” and that it was “processing all withdrawals and would continue to do so”. .

He claimed that FTX has a billion-dollar cash surplus and called on Zhao to “work together for the ecosystem.”

Nov. 7 – CZ refuses Alameda OTC deal

In response to a question on Twitter, Zhao signaled his disinterest in accepting the earlier deal Ellison was about to buy Binance’s FTT holdings for $22 per token saying “I think we’ll stay in the open market “.

November 8 – FTT Prices and Crypto Markets Begin to Give Up

Some analysts started warning on November 7 of a major drop in FTT prices due to the series of announcements and early on November 8 the price of FTT fell by around 30% to around 15.40 $ versus $22 within hours.

The price of Bitcoin (BTC) has also started falling on fears that FTX will soon be sinking.

Nov. 8 – FTX Faces “Cash Crisis”, Decides to Sell Exchange to Binance

In a shock announcement, Bankman-Fried said on Nov. 8 that FTX had “reached a strategic deal agreement” with Binance for the exchange to help cover what he called a “liquidity crunch.”

He added “all assets will be hedged 1:1” and cited this as the main reason why FTX asked Binance to intervene.

Zhao said shortly after that Binance had signed a non-binding letter of intent to acquire the exchange, but noted that they reserved the right to “withdraw from the agreement at any time”.

Nov 8-9 – SBF removes ‘assets are fine’ tweet, FTX websites go dark

Late on November 8, hours after announcing the deal with Binance, Bankman-Fried deleted its accusatory tweet thread which also claimed that FTX and its assets were “good.”

On November 9, the websites of FTX’s venture capital arm, FTX Ventures and Alameda, were taken offline, while unconfirmed reports circulate that FTX’s legal and compliance staff resigned on November 8. .

Related: Galaxy Digital discloses $77m exposure to FTX, $48m likely locked in withdrawals

On November 9, reports began to surface that Binance may be considering pulling out of the deal.

November 9 – Binance officially withdraws from the agreement

Less than 48 hours after Zhao’s initial announcement that Binance might buy FTX, Binance announced on Nov. 9 that it would not pursue the acquisition of FTX.

The exchange cited the alleged “[mishandling] customer funds and alleged investigations by U.S. agencies,” adding that “the issues are beyond our control or our ability to help you.”

November 9 – The Crypto Market in a Sea of ​​Red

The crypto market reacted to the news, with investor sentiment turning fearful, Bitcoin price hitting a multi-year low of $15,600, with analysts expecting further declines, suggesting Bitcoin could settle around the $12,000 mark.

Nov. 9 – SBF reportedly tells investors it needs $8 billion in emergency funding

On Nov. 9, reports surfaced that Bankman-Fried had asked investors for $8 billion in emergency funding to cover the “cash shortage” caused by user withdrawals over the past few days.

Bankman-Fried reportedly sought to raise up to $4 billion from investors and cover the remaining sum with debt financing and even his own personal fortune to make clients whole.

Nov 9 – FTX website advises against deposits, unable to process withdrawals

The FTX website was down on November 9 for about two hours and when it came back online it was accompanied by a disclaimer strongly advising against depositing and stating that the exchange was not in able to process withdrawals.

The warning was further confirmed in a message pinned on FTX’s official Telegram channel, with its admin saying that crypto and fiat withdrawals were affected and that they had “no idea” when it would be. back online, saying they “also lacked information at this point.” indicate.”