\n<\/p>\n
The crypto market is coming to grips with the prospect that FTX being acquired by Binance could mean that Sam Bankman-Fried\u2019s exchange and its close collaborator, Alameda Research, are potentially insolvent.<\/span><\/p>\n The market is tanking following the recent news of Binance\u2019s acquisition of FTX.<\/span><\/p>\n At the time of writing, BTC is down 10.85% and trading for roughly $18,300, meaning the top cryptocurrency is currently at the same price level as it was at the beginning of the summer; it has already threatened to break the range to the downside. ETH, meanwhile, has plunged 15.37% and is trading for $1,320.<\/span><\/p>\n The brutal price action is due to FTX\u2019s recent admission that the exchange was experiencing a liquidity crunch: the insolvency was so severe that Sam Bankman-Fried, the company\u2019s CEO, accepted selling FTX to rival cryptocurrency exchange Binance for an undisclosed amount.<\/span><\/p>\n While the acquisition is certainly good news for FTX users fearing having their funds frozen on the exchange, the revelation implies that FTX and quantitative trading firm Alameda Research (also founded by Bankman-Fried) are unlikely to meet their debt obligations should their creditors recall their loans.<\/span><\/p>\n This has caused some crypto tokens associated with FTX and Alameda to nosedive, with FTT (FTX\u2019s native token) being first among them. The coin <\/span>is down 80%<\/span> at the time of writing and trading at $4.5: a drastic drop considering Alameda CEO Caroline Ellison promised to help Binance unload its FTT stash for $22 only two days ago. SOL and other major Solana-based tokens <\/span>such as SRM<\/span> are down 21% and 25%, respectively, having been heavily backed by Bankman-Fried up until now.\u00a0<\/span><\/p>\n Meanwhile, Binance\u2019s own stablecoin, BUSD, has <\/span>surged<\/span> to trade at $1.01 despite being designed to always maintain a 1:1 parity with the U.S. dollar. BNB, Binance\u2019s native token, is also performing well considering the circumstances, as it is <\/span>only down<\/span> 6.8%. The coin previously pumped 24% on the news that Binance was acquiring FTX.<\/span><\/p>\n Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.\u00a0<\/span><\/p>\nFTT Plummeting\u00a0<\/b><\/h2>\n
Share this article<\/h4>\n