Thread by @eight_global

Update on the #FTX drama, which caused the yesterday's crash in crypto market 💥

How did FTX, the second biggest centralized exchange, almost died overnight and got acquired by @Binance?

Find out in this thread 👉

Most of the people think that this situation appeared out of thin air, However, it started years ago when @Binance became the early investor in FTX and obtained $2B in $FTT tokens. These were used for trading fees on FTX, as a part of the buyout.

In the meantime, FTX has become the second biggest centralized exchange, and partnering up with celebrities like Steph Curry and Tom Brady, which in turn helped FTX to attract a vast amount of retail investors.

Even though @Binance and @FTX_Official started as partners. The rise of the FTX to the second place in the ranking of CEXs created a logical #tension between these two parties.

@cz_binance stumbled on the fact that @SBF_FTX was in the close contact with regulators, and proposed changes which would ultimately hurt @binance

Besides that @AlamedaResearch (a sister company of @FTX_Official) faced apparent financial issues. Since it owned $12B in #assets, and about $7B in liabilities. This wouldn't be a problem if almost 50% of Alameda's asset wouldn't be $FTT tokens.

$FTT was plummeting and illiquid, Potentially causing Alameda to not be able to meet their #debt #obligations

@AlamedaResearch is also the biggest market maker on FTX, so logically, If #Alameda is in trouble, #FTX is in trouble as well.

Everyone in the market hoped that FTX would show financial strength and resolve this situation. However this well awaited event never came.

Three days ago, @cz_binance tweeted to his 7 million followers that @binance will sell their entire $2B stake in $FTT #tokens due to the recent events mentioned above.

@SBF_FTX tweets about the attempt of competition (understand @binance) to bring down the FTX and assures investors that FTX is "fine" (His tweet was deleted in the meantime).

Market has reacted to this news, sending FTX to its new lows, while CEO of @Alameda_Research offers to purchase the $FTT tokens from @cz_binance at 22$ per $FTT.

Users of @FTX_Official panic, withdrawing more than $1B+ within the period of 24 hours. FTX is facing liquidity crunch, restricting users from withdrawing their funds.

@SBF_Official stays quiet, spreading more extreme fear over the market.

Ultimately, @SBF_Official tweets that @FTX_Official is getting acquired by @Binance indirectly confirming the FTX financial issues.

Following the SBF's tweet @cz_binance tweets and clarifies the situation. Ultimately saying that acquisition of FTX was needed in order to save FTX, ultimately confirming the rumors about the terrible financial situation of @FTX_Official.

To summarize, @cz_binance has pulled ultimate move, By starting and spreading the rumor, Threatening to dump $FTT and ultimately purchasing Binance's biggest competitor, all within 48 hours.

For now, The FTX drama is over, although many questions arise over Binance's acquisition of FTX since regulators are closely observing the deal between the 2 exchanges.

More updates are coming soon.

Thank you for reading and don't forget to like and retweet!