Saturday, November 11, 2023

Exactly one year ago, FTX filed for bankruptcy after FTT collapsed. Customer funds gone, their data stolen, FTT deployer rugged, (alleged) huge price manipulation by Justin Sun, "FTX is fine" tweet etc. Bitcoin's price had crashed to $16k. But Bitcoin is now 130% higher

On the 11th November 2022, FTX filed for bankruptcy after freezing customer withdrawals because they could no longer meet the demand for customer withdrawal requests. Many of us probably know the story, but this event was (mostly) precipitated by CZ/Binance's annoucement of a decision to liquidate their FTT holdings.

https://preview.redd.it/8l2e0dh2zpzb1.png?width=913&format=png&auto=webp&s=72d5b80cc6836d85677c9c68cec3ae63d55f6aa6

Binance's decision itself came from loss of trust/speculations surrounding Alameda Research, the trading firm that was also run by SBF, holding extremely large amounts of FTT(as well as SOL) on their balance sheet which they used as collateral for loans.

Per Coindesk reported 2nd Nov 2022

Per Coindesk reported 2nd Nov 2022

Per Coindesk reported 2nd November

There was/is also a lot of backroom talk about disagreements between SBF and CZ such that SBF was through Binance and other exchange under the bus during talks with regulators.

Regardless, it just took a few days for market panic to set in, particularly because Binance's announcement took place over the weekend and the majority of trading happens during the week. FTT's price started sliding slowly then suddenly snowballed and hit fever pitch.

https://preview.redd.it/73329mmq0qzb1.png?width=822&format=png&auto=webp&s=0129d13e5f94b8a54cfc19b731591f81a8edbf06

FTX customers then began to panic withdraw funds followed by SBF putting out bewildering statements that "FTX was fine" and FTX posting pictures(now deleted) about their new corporate buildings.

https://preview.redd.it/rlnc0o1nypzb1.png?width=609&format=png&auto=webp&s=aec8ec5473e8dee211481ce21f951572d6b03059

https://preview.redd.it/kgj1dpxoypzb1.png?width=609&format=png&auto=webp&s=fffb8f9166442e6e2da9d816c3f8e4fa182033b6

As we know everything was definitely not fine as they later closed withdrawals. There was then a very strange "FTX credit facility" whereby customer could withdraw but only using tokens owned by Justin Sun(BTT,SUN,JST,TRX,HT etc) which caused the price of these tokens to jump by as much as 4600% over market price on FTX.

https://preview.redd.it/vggk2p095qzb1.png?width=940&format=png&auto=webp&s=6023e547d25ada7913145294fe7f6a51b1a4e680

https://preview.redd.it/rikmnb5c5qzb1.png?width=949&format=png&auto=webp&s=abc9164aaea8a754208f76e23308d394ce0d4a05

https://preview.redd.it/1wcwja8e5qzb1.png?width=954&format=png&auto=webp&s=b62f7da99790503ca89789647ef67929a2ad0469

Soon after however, they later filed for bankruptcy whereupon insiders too advantage by stealing customer data, draining customer funds etc.

Per Reuters

The FTT deployer was also drained as massive supply was suddenly unlocked.

FTT deployed drained

Bitcoin price dropped to as low as $16,300 from around $20,300 just days prior. Bitcoin is now around 130% higher than it was a year ago with seemingly more room to go and the price continues to appreciate. This turned out to be a great buy low sell high scenario.

https://preview.redd.it/dsht79y21qzb1.png?width=854&format=png&auto=webp&s=98cee03acc4c1a4f5f70d8804b99e5a4b75d6995


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