PanaTimes

Wednesday, Mar 22, 2023

Crypto crisis deepens with values suffering after Binance U-turns on FTX bailout

Crypto crisis deepens with values suffering after Binance U-turns on FTX bailout

Regulators and US officials are reportedly investigating as the FTX exchange teeters on the brink following a rush of withdrawals that are leaving customers facing big losses.

Bitcoin hovered just above a two-year low overnight and other cryptocurrencies suffered heavy losses as FTX teetered on the brink of collapse.

It had emerged on Wednesday that the Binance exchange had walked away from a non-binding bailout offer of smaller rival FTX - once the sector's fourth-largest exchange.

Binance said: "As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX."

FTX, whose native token FTT has lost 90% of its value this week following a surge of withdrawals, was reported by the Wall Street Journal to have told investors it needed $8bn (£7bn) to cover them.

Another exchange, OKX, said it was also approached by FTX chief Sam Bankman-Fried this week, who described liabilities of $7bn that needed covering quickly.

OKX director of financial markets, Lennix Lai, told the Reuters news agency: "Even Elon Musk would not be able to commit to a deal with $7bn liability within a few hours of negotiations.

"That was too much for us."

The latest turmoil for the sector is focusing on the unknown size of customer losses and the hit to sentiment from the latest and possibly largest collapse.


Binance CEO Changpeng Zhao pulled the plug on an offer to rescue FTX after the scale of its problems became clear.

The prospect of a top exchange failing follows the collapse of stablecoin TerraUSD and crypto hedge fund Three Arrows Capital this year.

Cryptocurrency markets nursed heavy losses on Thursday, with bitcoin attempting a recovery around the $16,700 level following a 20% dip on the week.

FTT slumped just above its record low of $1.50 but was trading just above $2.

Bankman-Fried said he was "exploring all the options" but there were no signs that any other rescue had been made available.

The US securities regulator was said by Reuters to be investigating FTX.com's handling of customer funds and crypto-lending activities while a separate report, by Bloomberg, suggested the US Department of Justice was also looking in to the turmoil.

Danny Chong, CEO of decentralised finance firm Tranchess, said the problems at FTX had wider ramifications than the sector's earlier failures.

"People's funds, including market makers', are still currently with FTX.

"Just when people were thinking that crypto winter might probably not last... along comes another episode like this."

Investors are already writing off funds ploughed into FTX.

Venture capital fund Sequoia Capital wrote down a $150m exposure to zero on Wednesday.

Canada's Ontario Teachers Pension Plan, Tiger Global and Japan's Softbank are also FTX investors.

Neil Wilson, chief markets analyst at markets.com, said the crisis was being felt more widely: "Whilst crypto isn't necessarily that big a market overall, it's certainly correlated to things like risk and liquidity and therefore it's adding to a negative feeling in the market today."
Newsletter

Related Articles

PanaTimes
Close
0:00
0:00
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
The US government has charged Chinese businessman Guo Wengui with leading a $1 billion fraud scheme that cheated thousands of followers out of their money.
Credit Suisse to borrow $54 billion from Swiss central bank
Russian Hackers Preparing New Cyber Assault Against Ukraine
"Will Fly Wherever International Law Allows": US Warns Russia After Drone Incident
If this was in Tehran, Moscow or Hong Kong
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
Drew Barrymore
China is calling out the US, UK, and Australia on their submarine pact, claiming they are going further down a dangerous road
A brief banking situation report
Lady bites police officer and gets instantly reaction
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
Silicon Valley Bank exec was Lehman Brothers CFO
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
Senator Tom Cotton: If the Mexican Government Won’t Stop Cartels from Killing Americans, Then U.S. Government Should
Banking regulators close SVB, the largest bank failure since the financial crisis
Silicon Valley Bank: Struggles Threaten Tech Startup Ecosystem"
Man’s penis amputated by mistake after he’s wrongly diagnosed with a tumour
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Is Gold the Ultimate Safe Haven Asset in Times of Uncertainty?
Spain officials quit over trains that were too wide for tunnels...
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
Givenchy Store in New York Robbed of $50,000 in Merchandise
European MP Clare Daly condemns US attack on Nord Stream
Former U.S. President Carter will spend his remaining time at home and receive hospice care instead of medication
Tucker Carlson called Trump a 'demonic force'
Kamala Harris: "The United States has formally determined that Russia has committed crimes against humanity."
US Joins 15 NATO Nations in Largest Space Data Collection Initiative in History
White House: No ETs over the United States
U.S. Jet Shoots Down Flying Object Over Canada
Nord Stream terror attack: David Sacks breaks down Sy Hersh's story
Being a Tiktoker might be expensive…
Miracle: El Salvador Search and Rescue teams, with the support of Turkish teams, rescued a woman and a child from the rubble 150 hours after the earthquake
SpaceX, the private space exploration company, made a significant breakthrough in their mission to reach space.
China's top tech firms, including Alibaba, Tencent, Baidu, NetEase, and JD.com, are developing their own versions of Open AI's AI-powered chatbot, ChatGPT
This shocking picture, showing how terrible is the results of the earthquake in Turkey
President Joe Biden delivered the 2023 State of the Union Address , in order to help Americans that missed the 2022 speech, do not have internet, and suffer from short memory.
The desk of King Carlos Alberto of Sardinia has many secret compartments
Today's news from Britain - 9th February 2023
China has declined the US's request for Defense Secretary Lloyd Austin to speak with Chinese Defense Minister Wei Fenghe after the US Air Force shot down a suspected Chinese spy balloon, according to the Pentagon
The five largest oil companies in the West generated combined profits of nearly $200 billion in 2022, which has led to increased calls for governments to impose tougher windfall taxes
2 earthquakes in Turkey killed over 2,300 people
×