On November 9 to 10, bitcoin briefly broke below $17,000 due to the FTX incident stemming from the FTX exchange. On a weekly basis, it has also fallen below the line where it should not be broken. I will try to summarize what is going on regarding the cause of this.
What is the FTX incident?
FTX is a crypto currency exchange based in the Bahamas. It is one of the fastest growing exchanges, with a Japanese subsidiary, and is a sponsor of the powerful F1 team Mercedes.
Binance’s CZ Announces Acquisition
The announcement that Binance would acquire FTX was momentarily boosted by CZ himself tweeting…
However, at the acquisition stage, information leaked that Binance was abandoning the acquisition due to its very poor financial condition.
FTT prices plummeted
The price of FTT, the FTX token, fell by more than -93%.
BTC crashed as well.
Following the FTT, BTC also fell sharply. The price drop was extremely large recently, dropping $4,800 in a short period of time.
Trouble between Binance and FTX
However, there were various problems between Binance and FTX behind this.
The following seems to be the process until the acquisition was abandoned. Someone has summarized it in detail. Here is a tweet in Japanese.
Summary in English
As a result, it seems that the Binance side has developed a credibility problem with FTX, since they appear to be willing to acquire FTX, but then decide against it.
- Binance to support FTX around 2020
- FTX to grow rapidly in 2021
- FTX Founder Sam Makes Political Contributions to U.S.
- Abuse of FTX’s own assets
- Exhausted balances available for withdrawal
- Sam consults Binance CEO CZ
- Binance announces acquisition of FTX
- Binance leaks fraudulent financial information on FTX subsidiary
- Binance announces it is selling FTX Governance tokens
- FTT crashes
- BTC also crashes
Withdrawals also suspended at FTXJapan
The FTX incident has also had a significant impact on FTXJAPAN, the company’s Japanese subsidiary, suspending customer withdrawals of virtual currency and also suspending withdrawals in Japanese yen.
FTX Files for Chapter 11 Bankruptcy
Subsequently, FTX filed for Chapter 11 bankruptcy protection. This happened in just 3 days.