Update (1115ET): It seems the pain this morning was enough to bring the two billionaires together as FTX’s Sam Bankman-Fried just tweeted that they have come to an agreement. The “strategic” agreement seems to be that Binance will buy FTX
1) Hey all: I have a few announcements to make.
Things have come full circle, and https://t.co/DWPOotRHcX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).
— SBF (@SBF_FTX) November 8, 2022
SBF additionally clarified that:
2) Our teams are working on clearing out the withdrawal backlog as is. 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.
3) But the important thing is that customers are protected.
4) A *huge* thank you to CZ, Binance, and all of our supporters. This is a user-centric development that benefits the entire industry. CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.
5) I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands.
Binance’s ‘CZ’ has also confirmed this in a tweet:
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
— CZ 🔶 Binance (@cz_binance) November 8, 2022
CZ added that:
“There is a lot to cover and will take some time. This is a highly dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time. We expect FTT to be highly volatile in the coming days as things develop“
That has sent FTT higher on extremely heavy volume…
And Bitcoin is seeing a notable relief rally, back above $20k…
We have to say – that was masterfully played by Binance’s CZ…
And this is how you acquire your biggest competitor overnight after nearly bankrupting them. https://t.co/h9qRWBVGsl
— zerohedge (@zerohedge) November 8, 2022
* * *
The war between two of crypto’s richest men – Binance’s ‘CZ’ and FTX’s Sam Bankman-Fried (SBF) – escalated last night (as we detailed here) with the price of many major cryptocurrencies tumbling after FTX Token (FTT) broke down and anxiety over FTX’s reserves heated up.
We have previously reported on the surge in outflows from the giant exchange…
Quite the capital flight from FTX amidst Alameda worries. pic.twitter.com/kd8U6HDG0s
— Dylan LeClair 🟠 (@DylanLeClair_) November 7, 2022
Despite Bankman-Fried reassurances that:
“FTX is fine. Assets are fine… A competitor is trying to go after us with false rumors,… FTX has enough to cover all client holdings.”
…but, this morning, it appears the situation has got a lot more serious as The Block reports that FTX seems to have stopped processing withdrawal requests, according to on-chain data.
“It appears that FTX has stopped processing on-chain withdrawals from at least their main identified wallets on Ethereum, Solana and Tron,” said Steven Zheng, a research analyst at The Block.
“This is weird as there presumably are still people queueing up waiting for their withdrawals.”
The last outgoing transaction from FTX on the Ethereum blockchain was at 0637ET (it’s reportedly a similar story on Tron and Solana blockchains)…
There have been lots of incoming transactions, but that is the last outgoing.
For now there is not much panic-selling reactions in Bitcoin or Solana for instance (which may suggest this is not as bad as it looks).
SBF has not responded yet.
Tyler Durden
Tue, 11/08/2022 – 11:17
