The great fall: why the FTX crypto exchange lost 94% of assets for the the week and was defeated by Binance

The great fall: why the FTX crypto exchange lost 94% of assets for the the week and was defeated by Binance

This is the right shock content for us, who are excited about business, related to cryptocurrencies, as well as the tragic story of the death of the star of the black billionaire for those who are inspired by successful people. The mustache turned out to be easy, so many people were simply not remembered, like a recent serious competitor of Binance, having become a lucky winner. All the same, it supports the zhorstok in the world of crypto-currencies, today your photo is in the rating of the richest people in the world, and tomorrow – on the wall of trophies in Changpeng Zhao. But why did it happen like that? Let’s take a look.

Fatal publication

Most importantly, the reason for the collapse of FTX was a speculative article on the 2nd fall of 2022 in the popular CoinDesk magazine, which was about the problems with the liquidity of Alameda Research, the trading company of FTX chief Sem Benkman-Fried. In fact, it was less than a spark, which caused the right to burn with the help of cryptocurrencies, but it was still smoldering until that moment. Even in the spring of 2022, Bloomberg’s eye-witnesses already paid respect to the tight links between FTX and Alameda and looked at schemes for which the companies were to take off the profits.


And although 30-year-old Sam Bankman-Fried denied the importance of Alamed’s role in every possible way, it became impossible to keep everything a secret. And although even the name of this company was chosen specifically so as not to attract public attention, Bankman-Fried’s share ownership and his name among the founders, as well as the unflattering comments of another co-founder, Gary Wang, about the close cooperation between the company and even the blind could not be unnoticed by the stock exchange. Well, the fact that Sam and Gary lived in the same apartment for a long time with the former CEO of Alameda Caroline Alison (and several other employees of both companies) does not need any comments at all. Therefore, the article in CoinDesk only exposed the problem, provoked the distrust of the owners of the FTT token, a quarter of which is listed as Alamed’s asset and is worth 14.6 billion dollars. After all, according to Arkhan, more than half of all company deposit withdrawals since 2018 have gone through FTX.

Just Alameda`s fault?

If they were objective, then it would be wrong to call the wine company. In fact, the whole business strategy led to the collapse, for which FTX and Alameda Research worked to get the maximum possible profit. The company itself was announced in 2018 as the main method of winning in terms of prices between cryptocurrencies from the USA and Japan. Today the trading company spent 15 million dollars between these countries and took 1.5 million net income. From time to time, the opportunity to make easy money arose, but also Sem Benkman-Fried, having already launched FTX, the company switched from arbitrage to the creation of the wet market.

As the crypto-exchange takes profits from commissions for transactions and from positions for traders, the trading company earns from retail in the purchase and sale of tokens. While FTT bankers can earn lower commissions for trading on the FTX exchange and higher referral premiums, Alameda has always had enough opportunities to collect extra profits from trading. In short, the company, in fact, for a long time was getting rich on the floor, and the activities did not support anything. Larry Tubb called this situation “unacceptable for the foundation of a fair market”, however, he points to the reasons for the possibility of such a phenomenon, and the lack of regulation between participants in the cryptocurrency market. It is also necessary to remember that trading on crypto exchanges is not registered with the blockchain and public books, which additionally stimulates the development of opaque schemes for wealth.

Lightning fast fall

So the publication in СoinDesk about problems with liquidity appeared on Friday. And in the same week, the founder of Binance, Changpeng Zhao, tweeted the news that this exchange is going to liquidate all the assets from FTT. The price of the token collapsed by 80%. And yet, in the second place, the FTT lords lost their assets on FTX by 6 billion, and then they got into trouble with the withdrawal of losses – it left Sem Benkman-Fried on the right.

On the eve of the cob of active days, the 8th leaf fall, Changpeng Zhao voted about the FTX exchange and the FTT token exchange trading on Binance. The former billionaire Benkman-Fried spent 94% of his capital. Natomist Binance took away one of the main competitors and it was firmly established as the largest crypto exchange with a total of 40 billion dollars. The failure of Sem Benkman-Fried is one of the biggest in the history of crypto trading.