Post by Admin/YBB on Nov 8, 2022 16:20:16 GMT -6
BIG news today, 11/8/22 was another crypto crash. The #3 exchange FTX (non-US ops; run by flamboyant SBF) went bust and was acquired for $1 + liabilities (and subject to DD) by its rival #1 Binance (non-US ops; run by cool sharpie CZ). Remember that SBF was the guy running around and rescuing other crypto firms in an earlier crypto crash, and some called him the new generation "Buffett", and now this happens to him. Also, due to stricter crypto regulations (some say, lagging/lacking), these firms had separate US and non-US operations; and this drama relates to their non-US operations.
#2 Exchange is Coinbase/COIN and it retains a US focus. It wan't involved in the Binance-FTX intrigue but it price was down as well.
And hey, this is YBB.
i.ibb.co/RH3hmWD/Screenshot-2022-11-08-16-21-29.png
See also Twitter LINK
Edit/Add, 11/8/22. It is surprising that in this day and age, what happened could happen. Binance and FTX had a spat. CZ/Binance attacked SBF/FTX, threatened to liquidate holdings of FTX token FTT, caused a crisis of confidence in FTX and sort of a run on FTX. Then Binance rescued FTX for a song ($1 + liabilities) with the contingency of due diligence - who knows if that turns out to be a Musk-ian trap to try to wiggle out of the deal later.
Coinbase/COIN CEO Bryan Armstrong had a long tweet explaining why its operations are different from those of Binance or FTX.
Twitter Bryan Armstrong
But then, those who relied on what SBF/FTX and CZ/Binance said just a few days ago got burned.
Edit/Add, 11/9/22. Binance walked away from FTX. Situation was hopeless after due diligence - customer funds were mishandled; the regulators looking into FTX.
Former billionaire (just a couple of days ago) SBF is reportedly bankrupt.
Edit/Add, 11/12/22. CRYPTO Intrigue and Crash. It started with a Twitter spat between Sam Bankman-Fried “SBF”/FTX and Changpeng Zhao “CZ”/Binance. There were prior frictions from SBF’s closeness to the DC lawmakers, his push for a crypto legislation that was disliked by the crypto industry, his flamboyance, and his MIT connections. Someone leaked Alameda Research balance sheet that held lots of FTX token FTT and had other issues involving self-dealings between FTX and Alameda. CZ threatened to sell Binance’s entire FTT holding (about a half-billion dollars, a lot but not really that much), and a run on FTT and FTX (international) began. Ironically, SBF asked CZ for a rescue, and initially CZ agreed to do that for a song ($1 + FTX liabilities), but then withdrew a day later upon due diligence (some say that CZ was never serious about the rescue and was really going for the final kill). Then, SBF tried to patch up a $8-10 billion hole by raising new funds from his investors/supporters, but by now, SBF, FTX and Alameda were damaged goods (especially after CZ pulled out of the rescue saying that situation was hopeless and beyond what he/Binance could do). So, SBF filed for bankruptcy for FTX and 130 related entities, and surprising, that also including FTX-US (it was previously thought that the problem was with FTX-International only). The $32 billion empire of 30-yr old SBF (and his personal net worth of $16 billion) collapsed within a week (literally, within hours) causing $125 billion in estimated losses in the crypto industry. Regulators all over the globe moved in to freeze FTX assets. In the US, the SEC, CFTC, WH and Congress are looking at this fiasco. The full extent of this crypto contagion is yet to be determined/felt. The US-listed Coinbase/COIN was not involved in this mess, but its stock also suffered. (News on Saturday morning is that SBF may have fled from Bahamas to Argentina)
ybbpersonalfinance.proboards.com/thread/362/barron-november-14-2022-2
Edit/Add, 11/13/22. SBF is/was very good at exploiting connections, real/imagined/implied. His parents are lawyers and/or political fund raisers (one CNBC regular fell for just that). His educational connections are also intriguing - the same place where the SEC Chair taught cryptos in a department headed by a parent of Alameda CEO (alleged to be a girl friend of SBF). The crypto legislation going through Congress should be looked at more closely for possible conflicts and manipulations and shouldn't be rushed citing the current chaos/crisis.
All seems like movie stuff except it wasn't for those caught in the mess.
www.mutualfundobserver.com/discuss/discussion/comment/155933/#Comment_155933
Edit/Add, 11/13/22. @roy (at MFO), simple explanations can be dangerous. But even with that risk, let me try.
Tokens are like prepaid store cards or chips on cruises/casinos. There are hundreds of unregulated crypto exchanges and most have their own tokens. That is what FTT was for the crypto exchange FTX (and its related market-maker Alameda). One uses some cryptos to buy exchange tokens (FTT in case of FTX). To promote their tokens, crypto exchanges offer great deals, discounts, favors.
But at some point, one wants to get off the train and change the tokens back into cryptos or dollars. But what happens if there is a crisis of confidence and tokens become almost worthless? You cannot trade them, and the "house" won't/cannot honor them. The trigger here was (Mr) CZ of Binance who was an early investor in FTX and received lots of FTTs for his stake in FTX. He got upset by something that (Mr) SBF of FTX did or said and CZ threatened to sell $500+ million in FTTs that he had. Well, that crashed FTT, FTX, Alameda, BlockFi (that FTX was in the process of acquiring), and a few others that we haven't heard about it yet (this situation is still unfolding).
Amazing that in something touted as DeFi (decentralized finance), 2 guys that most haven't heard of before could cause so much damage.
At the time of Enron collapse, my wife asked why did it matter to her or general public? She worked at a national store chain. I tried to explain that imagine 100s of stores like hers just vanishing overnight - buildings, stuff, inventory. And that kind of loss can impact EVERYBODY and it did.
Here too, whether one is in crypto or not, disappearance $125+ billions (industrywide loss est) will have an impact on EVERYBODY. For perspective, in a decent IPO year, startups raise $50+ billion in a year and that leads to good markets (a great year like 2021 has $142.4 billion IPOs, a terrible year like 2022 YTD only $7.6 billion). This crypto crash is going in reverse by draining money - industrywide, $125 billion gone!
www.mutualfundobserver.com/discuss/discussion/comment/155942/#Comment_155942
#2 Exchange is Coinbase/COIN and it retains a US focus. It wan't involved in the Binance-FTX intrigue but it price was down as well.
And hey, this is YBB.
i.ibb.co/RH3hmWD/Screenshot-2022-11-08-16-21-29.png
See also Twitter LINK
Edit/Add, 11/8/22. It is surprising that in this day and age, what happened could happen. Binance and FTX had a spat. CZ/Binance attacked SBF/FTX, threatened to liquidate holdings of FTX token FTT, caused a crisis of confidence in FTX and sort of a run on FTX. Then Binance rescued FTX for a song ($1 + liabilities) with the contingency of due diligence - who knows if that turns out to be a Musk-ian trap to try to wiggle out of the deal later.
Coinbase/COIN CEO Bryan Armstrong had a long tweet explaining why its operations are different from those of Binance or FTX.
Twitter Bryan Armstrong
But then, those who relied on what SBF/FTX and CZ/Binance said just a few days ago got burned.
Edit/Add, 11/9/22. Binance walked away from FTX. Situation was hopeless after due diligence - customer funds were mishandled; the regulators looking into FTX.
Former billionaire (just a couple of days ago) SBF is reportedly bankrupt.
Edit/Add, 11/12/22. CRYPTO Intrigue and Crash. It started with a Twitter spat between Sam Bankman-Fried “SBF”/FTX and Changpeng Zhao “CZ”/Binance. There were prior frictions from SBF’s closeness to the DC lawmakers, his push for a crypto legislation that was disliked by the crypto industry, his flamboyance, and his MIT connections. Someone leaked Alameda Research balance sheet that held lots of FTX token FTT and had other issues involving self-dealings between FTX and Alameda. CZ threatened to sell Binance’s entire FTT holding (about a half-billion dollars, a lot but not really that much), and a run on FTT and FTX (international) began. Ironically, SBF asked CZ for a rescue, and initially CZ agreed to do that for a song ($1 + FTX liabilities), but then withdrew a day later upon due diligence (some say that CZ was never serious about the rescue and was really going for the final kill). Then, SBF tried to patch up a $8-10 billion hole by raising new funds from his investors/supporters, but by now, SBF, FTX and Alameda were damaged goods (especially after CZ pulled out of the rescue saying that situation was hopeless and beyond what he/Binance could do). So, SBF filed for bankruptcy for FTX and 130 related entities, and surprising, that also including FTX-US (it was previously thought that the problem was with FTX-International only). The $32 billion empire of 30-yr old SBF (and his personal net worth of $16 billion) collapsed within a week (literally, within hours) causing $125 billion in estimated losses in the crypto industry. Regulators all over the globe moved in to freeze FTX assets. In the US, the SEC, CFTC, WH and Congress are looking at this fiasco. The full extent of this crypto contagion is yet to be determined/felt. The US-listed Coinbase/COIN was not involved in this mess, but its stock also suffered. (News on Saturday morning is that SBF may have fled from Bahamas to Argentina)
ybbpersonalfinance.proboards.com/thread/362/barron-november-14-2022-2
Edit/Add, 11/13/22. SBF is/was very good at exploiting connections, real/imagined/implied. His parents are lawyers and/or political fund raisers (one CNBC regular fell for just that). His educational connections are also intriguing - the same place where the SEC Chair taught cryptos in a department headed by a parent of Alameda CEO (alleged to be a girl friend of SBF). The crypto legislation going through Congress should be looked at more closely for possible conflicts and manipulations and shouldn't be rushed citing the current chaos/crisis.
All seems like movie stuff except it wasn't for those caught in the mess.
www.mutualfundobserver.com/discuss/discussion/comment/155933/#Comment_155933
Edit/Add, 11/13/22. @roy (at MFO), simple explanations can be dangerous. But even with that risk, let me try.
Tokens are like prepaid store cards or chips on cruises/casinos. There are hundreds of unregulated crypto exchanges and most have their own tokens. That is what FTT was for the crypto exchange FTX (and its related market-maker Alameda). One uses some cryptos to buy exchange tokens (FTT in case of FTX). To promote their tokens, crypto exchanges offer great deals, discounts, favors.
But at some point, one wants to get off the train and change the tokens back into cryptos or dollars. But what happens if there is a crisis of confidence and tokens become almost worthless? You cannot trade them, and the "house" won't/cannot honor them. The trigger here was (Mr) CZ of Binance who was an early investor in FTX and received lots of FTTs for his stake in FTX. He got upset by something that (Mr) SBF of FTX did or said and CZ threatened to sell $500+ million in FTTs that he had. Well, that crashed FTT, FTX, Alameda, BlockFi (that FTX was in the process of acquiring), and a few others that we haven't heard about it yet (this situation is still unfolding).
Amazing that in something touted as DeFi (decentralized finance), 2 guys that most haven't heard of before could cause so much damage.
At the time of Enron collapse, my wife asked why did it matter to her or general public? She worked at a national store chain. I tried to explain that imagine 100s of stores like hers just vanishing overnight - buildings, stuff, inventory. And that kind of loss can impact EVERYBODY and it did.
Here too, whether one is in crypto or not, disappearance $125+ billions (industrywide loss est) will have an impact on EVERYBODY. For perspective, in a decent IPO year, startups raise $50+ billion in a year and that leads to good markets (a great year like 2021 has $142.4 billion IPOs, a terrible year like 2022 YTD only $7.6 billion). This crypto crash is going in reverse by draining money - industrywide, $125 billion gone!
www.mutualfundobserver.com/discuss/discussion/comment/155942/#Comment_155942