The digital assets industry has been affected by the near-collapse of Sam Bankman-Fried's FTX, which secured a rescue deal with arch-rival Binance after a surge in customer withdrawals caused a liquidity crisis.
There is a significant crunch liquidity according to Changpeng "CZ" Zhao. The letter of intent to buy FTX was signed by the company, but it had the ability to pull out at any time.
One of the biggest and most prominent companies in the global cryptocurrencies industry was rescued by its main competitor. Smaller coins faced steep falls while the most actively traded token fell. In the US, the exchange dropped about 14 percent.
At the beginning of the year, FTX had a valuation of $32 billion, with investors including SoftBank and the Ontario Teachers' Pension Plan. In an industry that has been called the "Wild West" by Wall Street's top regulator, FTX was widely considered to be one of the better- managed players.
Bankman- Fried had a paper fortune of an estimated $24 billion six months ago. Bill Clinton and Tony Blair have both been interviewed by him, he is one of the best-known executives in the industry.
The deal will combine two of the world's biggest coin exchanges, ending the public row between Bankman- Fried and Zhao.
FTX's troubles worsened over the weekend when Binance said it intended to sell its holdings of FTX's token, FTT, citing concerns over the exchange's financial stability.
AdvertisementBankman- Fried said that a competitor was trying to go after them with false rumors. If he could work with him, he would love it.
The FTX chief said that FTX was fine. Assets are in good shape.
He said on Tuesday: "CZ has done an incredible job of creating a freer economic world." Bankman- Fried said that all customer assets would be covered. The terms of the deal were not disclosed immediately.
The deal will consolidate the position of the largest platform in the industry.
The co-head of digital assets at Marex Solutions said that Zhao is the most powerful player in the field. The weight of his views will be more powerful when it comes to interacting with regulators and policymakers.
Since the failure of the terra and luna token in May, the industry has been struggling. Several large companies, including lender Celsius Network and hedge fund Three Arrows Capital, have collapsed due to the plunge in the price of the flagship token.
The rescue deal is a major blow for Bankman-Fried, who has been viewed as a relatively stable and ambitious figure in the often shaky world of crypt.
He earned a reputation as an industry saver after helping failing companies. The FTX chief made a $250 million loan to BlockFi.
The FTX loan, which was worth about $485 million in cash and digital currency, was used to rescue the broker.
Bankman-Fried wanted to shake up trading of Wall Street futures and equity markets, and bought a stake in a retail broker.
The Miami Heat's basketball arena will be renamed the FTX Arena for 19 years. Bankman-Fried said that buying Goldman was not out of the question.
The Financial Times All rights belong to the person. Not to be copied or altered in any way.
All Rights Reserved © 2024
