FTX, which has rattled the cryptocurrency market since a few days ago, eventually went bankrupt. 바이낸스 거래소 입금 With the bankruptcy of the world’s third-largest cryptocurrency exchange, the bitcoin-led cryptocurrency market will enter a rapid cooling period. It is the largest bankruptcy case in the history of the cryptocurrency industry, with up to 66 trillion won in company debt alone. It is known that the assets held are similar. Creditors expect massive disruption of more than 100,000 people.
FTX withdrawal situation The liquidity crisis quickly hit FTX. This is because Coinesk analyzed the assets of FTX affiliate Alameda Research and announced that more than one-third of their assets were made up of coins called FTT.
Why is it that the FTT is more than one-third? The biggest problem with this situation is that Alameda borrowed the FTT issued by FTX and took out a dollar loan as collateral. You deposit the dollar you borrowed into FTX, and you buy FTT with the dollar you deposited. Then the price of FTT will go up, right?
Alameda Research has a lot of FTT, so all the gains are recorded as profits. You can appeal to investors that the company is doing well without doing anything. Investors continue to buy FTT. You take it back and you get a dollar loan, you buy the FTT with the dollar you get, you raise the price, you get another dollar loan based on the increase in asset value…
Would Binance, the world’s No. 1 cryptocurrency exchange, have stayed put? Binance, which has learned from the Terra incident, announces that it will sell all of its FTTs.
Huh? Isn’t FTT a scam after all?
Sensing a sense of crisis, investors began withdrawing funds from FTX. In 72 hours, more than 8 trillion won was withdrawn in an instantaneously. Because it’s a 24-hour coin market, it accelerated and money began to be withdrawn faster.
Bottles and liquor is Binance
When FTX was on the verge of bankruptcy, Binance, an industry competitor, sought to acquire it. He said he would sell all of the FTT, so he made this situation and reached out.
It was just a non-binding acquisition letter, but the market began to stabilize. But that was also brief, and eventually Binance announces that it will not take over FTX. That’s just one day.
Looking inside the FTX, which has more problems than expected, there must have been a sense of crisis that they might collapse together after acquiring it. It was also a big problem that Binance was too close to China to touch U.S.-based assets.
Even if I tried to take over, I think it would have been a step to give up due to all kinds of procedures and regulations.
After the withdrawal of the acquisition of Binance, he attempted to inject emergency funds, but even this failed and eventually went bankrupt.
In fact, the reason for FTX’s bankruptcy is fundamentally the same as the reason for Luna’s bankruptcy in Korea. Binance issued it while attempting to sell all of FTX’s own holdings of FTT. The fact that both FTX and affiliated Alameda Research assets are made up of FTT has led to more people questioning the stability.
Huh? If FTT crashes, doesn’t FTT eventually fail?
As more and more people think about this, they started withdrawing money from FTX, and the liquidity crisis came rapidly. Binance reached out, but quickly withdrew, and this was the situation.
The timeline from November 9th to November 11th yesterday afternoon is as follows.
Binance: Hey, we’re taking over FTX
FTX: Okay, good! We don’t have a problem!
Binance: Wow, if we take over the company here, we’re going to go under, too Withdrawal!
Customers: FTX, give me my money. Hurry up and give it to me
FTX: Customers, please wait a moment. No money to give.
on the morning of November 11th
CEO: I guess that’s it for us.
Staff: Hey, let’s run! Everyone, quit!
November 11th, afternoon
CEO: We’re going bankrupt! I’m sorry!
Doesn’t it look like a picture I’ve seen somewhere? It’s almost the same as what you showed during the Luna crisis.
In fact, the decisive driver of this situation is Binance. By selling the FTT held by rival Binance to the market, he gave the message that FTX was not a reliable place.
Some people are solving the plot by saying that Chinese Binance attacked American FTX. BNB, a self-coin run by Binance, is still well defended.
Solana, known as FTX-related coins, is also falling.
Basically, financial assets need credit creation to run the economy. By printing money and lending it times as many times as it does, it’s invigorating the market. If the currency is 100, and the reserve ratio is 10%, the bank can make 1,000 dollars.
If the bank becomes insolvent, the remaining 900 could disappear like a mirage. However, it goes back because it believes in the subject of the bank, and it is not that the bank does not become insolvent. However, if it becomes insolvent, the central bank intervenes and injects funds, and based on this, the situation is not transmitted to other fields.
The cryptocurrency market also has this credit creation. The most representative one is the famous Di-Fi. If you leave virtual currency in charge, you’ll get 20% of the interest.
If FTT issued by FTX becomes worthless as it is now, all the defies that used to operate on it will no longer be able to pay interest, and then the companies that run the defies will be forced to go bankrupt. Liquidity supply is very difficult because there is no central bank in the cryptocurrency market. Therefore, the transmission that is unimaginable with the insolvency in reality begins.
I don’t know how this FTX bankruptcy will turn out. Will it be the beginning of a complete darkness? I don’t know.