Sam Bankman-Fried has told FTX.com investors that the exchange is teetering on the brink of bankruptcy unless it secures an urgent cash injection, according to Bloomberg.
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Editor's Note: Unbearable — Why This Downturn is Different
Molly Jane Zuckerman writes...
If you haven't looked at crypto prices in the past 24 hours, you'll be in for a bit of a shock.
While Bitcoin was playing with $21,000 just last week, it's now down to levels not seen since right before the last bull run.
CMC also looks a bit different, with stablecoins taking up three of the top six places on the homepage as traders run for any kind of stability. That's a far cry from bull market times, when altcoins and even memecoins were jostling for that top space.
The question that everyone is asking now is — what does this latest crash mean for the markets? Is this a "buy the dip" situation, is this a HODL-for-dear-life kind of deal, or is this something entirely new, an as-of-yet unexperienced type of drop?
Prices have previously been brought to new lows by things like crypto hacks, overhyped trends losing their hype, and Elon Musk tweeting that BTC is bad for the environment. But since this cycle is now coming off of the back of a major global pandemic, soaring interest rates, rising gas prices, a war in Eastern Europe, and now the potential insolvency of one of the largest crypto exchanges — it's a combination of factors that could mean that this bear market is just a bit different from all of the rest.
And it all makes those trite Crypto Twitter favorites like diamond hands, buy the dip and WGMI seem like they won't be enough to calm market panic this time. Can we all HODL our way out of this one, this time?
Binance abandons FTX acquisition ❌
Binance has announced that it will no longer pursue plans to acquire FTX. The world's biggest exchange said this followed due diligence and "news reports regarding mishandled customer funds." A Binance spokesperson said the issues facing FTX "are beyond our control or ability to help." It came a day after Changpeng Zhao said a non-binding letter of intent had been signed to explore the deal. The crypto markets slid even further on the news — with Bitcoin reaching new depths of $15,682 as investors panicked. But it's FTX's FTT token that's suffering the most. It hit lows of $2 late on Wednesday — and has fallen by 42% over the past 24 hours. Last night, CZ tweeted: "Sad day. Tried, but 😭"
'I f***** up,' Sam Bankman-Fried says 📉
Sam Bankman-Fried has told FTX.com investors that the exchange is teetering on the brink of bankruptcy unless it secures an urgent cash injection, according to Bloomberg. After Binance pulled out, the embattled CEO warned FTX has a shortfall of up to $8 billion — and needs $4 billion to stay solvent. On a call with investors, SBF admitted: "I f***** up." His exchange has now suspended registrations for new users, and withdrawals remain suspended for current customers. Several high-profile Crypto Twitter personalities have confirmed they are affected. Tron founder Justin Sun has also revealed that he is "putting together a solution together with FTX to initiate a pathway forward," but it's unclear what this would involve.
Understanding what happened at FTX 💸
According to Reuters, Alameda Research — SBF's trading firm and FTX's sister company — "suffered a series of losses from deals" in May and June this year. It's alleged Bankman-Fried transferred at least $4 billion in FTX funds to prop up Alameda, including customer deposits. Reuters goes on to claim that other FTX executives were not told. Last week's CoinDesk report appeared to lift the lid on Alameda's finances — and revealed that much of the $14.6 billion on its books consisted of FTT, FTX's native token. This, when combined with the revelation that Binance intended to offload $580 million in FTT tokens because of "recent revelations," led to a rush of withdrawals at FTX that totalled $6 billion in just 72 hours.
Meta is slashing 11,000 jobs 🚨
Meta has announced that it's cutting 11,000 jobs, in what Mark Zuckerberg has described as "some of the most difficult changes" made in the company's history. The tech giant — which owns Facebook, Instagram and WhatsApp — is reducing its overall workforce by 13% and taking other steps to become "a leaner and more efficient company." In a statement, Zuckerberg confirmed that jobs will be cut in its struggling metaverse division Reality Labs — as well as across the company's family of apps. To put these job cuts into context, Twitter lost about 3,750 staff when it halved its headcount last week — meaning Meta's reduction is far more drastic in terms of the number of people affected.
Fake Twitter accounts get blue ticks 👀
Elon Musk had vowed to bring "power to the people" by opening verified check marks to everyone through Twitter Blue subscriptions. But it's not going well so far — with parody accounts now getting verified. One of the profiles with a blue tick is in the name of former British prime minister Tony Blair, with a tweet warning: "It's very much a moderation failure that this account is still active." Another quipped: "If I was smart enough, I'd use my blue tick account to attempt to scam y'all out of crypto or NFTs or something." Other accounts that have been awarded blue ticks include "Nintendo of America" — and it shows Mario giving the middle finger to followers.
