Although Alameda’s CEO says that its leverage is considerably less because the appetite for credit has dropped following the crypto crash. The health of Alameda will have more of an impact on the broader crypto community because it uses leverage. That leads to the real questions that should be asked. The stablecoin reserves can be quickly topped up (and were) by selling other cryptos to buy more stablecoins which in turn fund redemptions. But the level of its stablecoin reserves is unimportant if FTX has plenty of capital. So yes, people were heading for the exits at FTX yesterday. One of the challenges is that some less informed retail investors misinterpret the data. This is prima facie evidence that a mini run is happening and is the sort of thing that can cause a stampede. One analytics firm Cryptoquant was tweeting charts showing the drawdown in FTX’s stablecoin reserves and the spike in Ethereum withdrawal volumes yesterday.
The transparency enabled by blockchain has pros and cons. it’s not the first social media triggered mini run.if exchanges were more regulated, would all of this have been on Twitter?.the real question should be about FTX’s (rather than Alameda’s) balance sheet.runs can be exacerbated by users watching activity in real-time.But we won’t support people who lobby against other industry players behind their backs. We gave support before, but we won’t pretend to make love after divorce. “Liquidating our FTT is just post-exit risk management, learning from LUNA. However, after using the ‘fail’ word above, a tweet a few hours later referenced LUNA, the coin of the failed Terra stablecoin project.
Our industry is in its nascency and every time a project publicly fails it hurts every user and every platform.” Regarding any speculation as to whether this is a move against a competitor, it is not. He said he expected the liquidation to take a few months, and Alameda Research’s CEO Caroline Ellison responded on Twitter that Alameda would buy the lot off him for $22, a price below the value at the time.Īs part of his announcement, CZ tweeted “Binance always encourages collaboration between industry players. Yesterday Binance’s CZ tweeted that it was selling its FTT holdings which Binance acquired when it converted its equity stake in FTX to $2.1 billion in stablecoins and FTT. The news initially didn’t have much impact, with the FTT token price drifting down by just over 5% but it was almost back to where it started by Saturday. It showed that Alameda held $14.6 billion in assets at the end of June, but a significant proportion related to FTX’s token, FTT, including $3.66 billion in unlocked FTT and $2.16 billion in FTT collateral. Last week, Coindesk published some snippets from the balance sheet of Alameda Research, the crypto market-making firm that Bankman-Fried also controls. He continued, “We’re grateful to those who stay and when this blows over we’ll welcome everyone else back.” What happened?Īcknowledging the withdrawals, yesterday Bankman-Fried wrote on Twitter, “We’ve already processed billions of dollars of deposits/withdrawals today we’ll keep going… We’re hitting node rate capacity, will keep going.” He didn’t just say he planned to sell Binance’s FTT token (the FTX token) holdings but that it was “post-exit risk management, learning from LUNA.” The mere mention of Terra’s LUNA coin – the one that ignited the crypto crash in May – seems to have exacerbated the matter.
#SPARK TOKEN PRICE SERIES#
The main trigger was likely a series of tweets by Binance CEO Changpeng Zhao (CZ).
Bankman-Fried acknowledged the activity on Twitter yesterday. The crypto exchange FTX run by Sam Bankman-Fried, experienced significant withdrawals over the weekend.
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