Fintech: FTX fallout
Global crypto exchange FTX collapsed yesterday, an apparent victim of its founder’s hubris and its top rival’s ruthlessness, Axios’ Dan Primack writes.
Why it matters: Booms and busts are common in crypto, but never anything close to this magnitude.
The headline: Binance, the world’s largest crypto exchange, agreed in principal to acquire FTX, the world’s third-largest crypto exchange.
• Kia Kokalitcheva and Crystal Kim report that FTX US, the U.S.-based subsidiary of the embattled crypto exchange, is not affected by FTX’s liquidity crunch.
• Brady Dale and Crystal remind us that the agreement is nonbinding, details are sparse, and even Binance CEO Changpeng “CZ” Zhao has warned that his company “has the discretion to pull out from the deal at any time.”
• Brady explains what exchange tokens are, why they matter, and how FTX’s native token, FTT, ended up at the center of the exchange’s collapse.
• And Matt Phillips notes that FTX founder Sam Bankman-Fried is just the latest business hero to get his comeuppance in this economic cycle.
• FTX turmoil raises the risk that two huge political donors will fade (Bloomberg)
• Binance, Gate.io, KuCoin, Poloniex, Bitget, Huobi and OKX promise to implement ‘proof of reserves’ (CoinDesk)
• Binance’s plan to acquire FTX is a ‘real-life Game of Thrones’ (TechCrunch)
Go even deeper: Listen to Dan Primack, Crystal Kim and Brady Dale discuss more on Twitter Spaces.
Global crypto exchange FTX collapsed yesterday, an apparent victim of its founder’s hubris and its top rival’s ruthlessness, Axios’ Dan Primack writes.Why it matters: Booms and busts are common in crypto , but never anything close to this magnitude. And the reverberations are deafening.The headline: Binance , the world’s largest crypto exchange, agreed in principal to acquire FTX , the world’s third-largest crypto exchange.
• Deal terms weren’t disclosed, and it seems likely that specifics haven’t yet been determined. FTX continues to spiral, with many speculating, (and one source reporting) that the merger will never close.The consequences: This is a disaster for some of venture capital’s top names, including Sequoia Capital, and may eventually prompt LP litigation threats .The bottom line: This isn’t a replay of Enron or Theranos, but it sure has echoes of both.
• Kia Kokalitcheva and Crystal Kim report that FTX US , the U.S.-based subsidiary of the embattled crypto exchange, is not affected by FTX ‘s liquidity crunch.
• Brady Dale and Crystal remind us that the agreement is nonbinding, details are sparse, and even Binance CEO Changpeng “CZ” Zhao has warned that his company “has the discretion to pull out from the deal at any time.”
• Brady explains what exchange tokens are, why they matter, and how FTX ‘s native token, FTT, ended up at the center of the exchange’s collapse.
• And Matt Phillips notes that FTX founder Sam Bankman-Fried is just the latest business hero to get his comeuppance in this economic cycle.
• FTX turmoil raises the risk that two huge political donors will fade (Bloomberg)
• Binance , Gate.io, KuCoin, Poloniex, Bitget, Huobi and OKX promise to implement ‘proof of reserves’ (CoinDesk)
• Binance ’s plan to acquire FTX is a ‘real-life Game of Thrones’ (TechCrunch)
