Reporter | Si LinweiOn November 9th, the world's largest cryptocurrency exchange, Coin On, suddenly announced its plan to acquire another exchange, FTX, which is also one of the world's largest exchanges.At 0am on the 9th, SBF, the founder of FTX, and Zhao Changpeng (English name CZ), the founder of Coin Security, wrote that the two sides had reached a preliminary agreement on the acquisition of FTX by Coin Security Capital
Reporter | Si Linwei
On November 9th, the world's largest cryptocurrency exchange, Coin On, suddenly announced its plan to acquire another exchange, FTX, which is also one of the world's largest exchanges.
At 0am on the 9th, SBF, the founder of FTX, and Zhao Changpeng (English name CZ), the founder of Coin Security, wrote that the two sides had reached a preliminary agreement on the acquisition of FTX by Coin Security Capital.
Zhao Changpeng tweeted, "This afternoon (November 8th local time in the United States), FTX sought help from us due to a severe liquidity squeeze. In order to protect users, we signed a non binding letter of intent, and Coin An intends to fully acquire (FTX). We will conduct a complete investigation into this matter in the coming days
There is a lot of content to cover and it will take some time. This is a highly dynamic situation, and we are evaluating it in real-time. Coin An has the right to withdraw from the transaction at any time. As the situation develops, we expect the price of FTT to fluctuate significantly in the next few days, "Zhao Changpeng added.
FTX founder SBF also stated on social media: "The matter has come to a successful end, as FTX's first and last investor (both Binance). We have reached a strategic transaction agreement with Coin An (awaiting due diligence) Our team is clearing the backlog of withdrawals according to the original situation, which will eliminate the liquidity squeeze; All assets will be covered 1:1. This is one of the main reasons we require Coin An to join. This may take some time to fully resolve, and we apologize for this
He also expressed great gratitude to CZ, Coin An, and all FTX supporters, emphasizing that this is a user centered development that benefits the entire industry. CZ has made incredible efforts in building a global crypto ecosystem and creating a freer economic world, and will continue to do so in the future. I know that there have been rumors in the media that there is a conflict between our two trading platforms, but Coin has repeatedly stated that they are committed to building a more decentralized global economy while working to improve their relationships with regulatory agencies. He will take care of everything well
After the news was released, the prices of the two exchange tokens FTT and BNB were experiencing severe fluctuations, with the maximum increase in FTT even reaching 46.76% within 15 minutes, breaking through $20 at one point.
This acquisition event has become the biggest dramatic turning point in the cryptocurrency industry in recent times.
On November 2nd, CoinDesk reported that a private financial document pointed out the potential debt situation of Alameda Research, another subsidiary of SBF and a sister company of FTX. The article states that the majority of Alameda's balance sheet assets are FTX platform TokenFTT. As of June 30th, Alameda's assets amounted to $14.6 billion, with the largest single asset being $3.66 billion worth of FTT, and other important assets including $3.37 billion worth of SOL and Solana Ecological Token. The debt is $8 billion, mainly consisting of $7.4 billion in loans.
Subsequently, the community began to question the opaque insider trading between Alameda Research and FTX, but was rebutted by Alameda Research, stating that the balance sheet only reflected a portion of its assets.
The addition of Zhao Changpeng, the founder of Coin An, continued to ferment the incident, stating that after withdrawing from FTX's equity last year, Coin An received approximately $2.1 billion in cash equivalent (consisting of BUSD and FTT). Due to recent exposure, Coin An has decided to liquidate all remaining FTTs on its books. Coin An will attempt to do so in a way that minimizes market impact. Due to limited market conditions and liquidity, it is expected that the selling behavior will take several months to complete. He emphasized that Coin An always encourages cooperation among industry participants, and this sell-off is not related to "targeting competitors"
Before announcing the acquisition, the founder of FTX also emphasized that "FTX is good" in an attempt to salvage the liquidity crisis. On November 9th, Zhao Changpeng stated on his social media platform that two lessons can be learned from the FTX incident: firstly, do not use tokens created by oneself as collateral; Secondly, if you operate cryptocurrency business, please do not borrow. Do not "effectively" use capital, ensure a large amount of reserves. In addition, Coin An has never used BNB as collateral or assumed debts.
It is worth noting that Coin An was the first and last investor of FTX.
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