Besides, the scandals of Celsius and Terra Luna seem very small. Since Tuesday, the FTX cryptocurrency exchange has been in turmoil and could well disappear forever if it failed to sign an emergency funding plan. It would then take with it millions of individuals and investors, today blocked without the possibility of recovering their funds.
Its biggest competitor ever, Binance, has a big responsibility in the situation. After supporting media revelations CoinDesk on FTX’s solvency doubts, Binance tried to buy the platform before saying that this was not possible in view of the very delicate financial health of its competitor. In the meantime, the company shook up the market, selling all of its holdings in FTT, FTX’s native cryptocurrency.
Below, we offer 10 figures to understand the magnitude of the situation facing FTX, its users, as well as the entire crypto planet.
That’s how long it took for FTX to go from the second largest cryptocurrency platform in the world to a company close to compulsory liquidation. This is also the length of time it took for FTT, FTX’s native cryptocurrency, to plunge over 90%. And while most users had their assets on the platform, most now find themselves in a very delicate situation: some have lost thousands or even hundreds of thousands of dollars. FTT went from being over $25 on trades below $3.
It is the depreciation of the wallet of Sam Bankman-Fried, the boss of FTX, who launched his competitor to Binance in 2019. Long multi-billionaire, the man of only 30 years saw his fortune go from more than 26 billion dollars to its peak at less than a billion today. A few hours before the Tuesday, November 8 announcement of the takeover of FTX by Binance, Sam Bankman-Fried still had more than 15.3 billion dollars according to his stake in Binance. “This is the biggest one-day slump on record among billionaires tracked by Bloomberg”wrote the agency.
This is the number of years since the start of the dispute between Sam Bankman-Fried (FTX) and Changpeng Zhao (Binance). The two bosses have often had the opportunity to rub shoulders, while Binance has already invested in FTX and in particular in FTT, but over time, the competition between the two companies has turned into a fight where all shots are allowed. Sam Bankman-Fried, until recently, did not hesitate to point out the origin of Changpeng Zhao by writing on Twitter that he suspected him of working with the Chinese government. Vibe.
The little tweet addressed to @cz_binance https://t.co/hG6s1Bz0ZT
— Gregory Raymond 🐳 (@gregory_raymond) November 10, 2022
10 times more
This is the comparison between the trading volume on Binance and on FTX. Binance remained far ahead of its competitor, but as the months went by, the platform saw FTX becoming more and more of a problem as its growth continued. The platform had big plans. One of them corresponded to the creation of a new native stablecoin. FTX had raised a significant amount of capital for its investments and to support its external growth.
In its early days, FTX was able to rely on Binance. A very strategic gesture on the part of Changpeng Zhao to hold his opponent, and place his pawns if opportunities presented themselves. Thus, Binance held until November 7 a stake of up to $2.1 billion in FTX. This included funds in FTT but also in BUSD, Binance’s stablecoin.
To strangle FTX, Binance relied on media revelations CoinDesk, regarding suspicions about the solvency of FTX. According to the media, FTX was not in a position to be able to reimburse its customers if a major event occurred in the world of crypto-currencies, and a shock hit the price of FTT. For journalists, FTX would be heavily exposed to its own cryptocurrencies and nothing could have allowed it to recover if its price collapsed. Binance therefore sold a large part of its stake, the equivalent of $584 million.
Zero new clients at FTX since Tuesday November 8th. In the turmoil, FTX has seen its site go offline several times and faced with the difficulties that are already arising for its current customers, FTX has decided to close access to the opening of new accounts on the platform.
Yes, something went wrong pic.twitter.com/FLMPdtO98x
— Gregory Raymond 🐳 (@gregory_raymond) November 9, 2022
For users already invested in FTX, it’s a nightmare. It has been three days since anyone can recover their funds and transfer them elsewhere. It is still possible for them to exchange them on FTX in other crypto-currencies, but if FTX disappeared, their wallet stored on the platform could find themselves in a complicated situation. The importance of storing your crypto-currencies on a cold wallet.
FTX is a big player. In a very gloomy context for the cryptocurrency market, the disappearance of FTX would be a colossal shock. Fear has taken hold of the sector again and most of the most important cryptocurrencies are unscrewing. To realize this, just look at the global capitalization of all the currencies tracked by the CoinGecko site. According to the platform, more than 200 billion dollars have evaporated in the space of 48 hours. Currently, the capitalization of cryptocurrencies is under the $1 trillion mark. It hit $832 billion, its lowest since the start of January 2021.
This is the price reached by Bitcoin, the flagship cryptocurrency, following the sinking of FTX. A price that sends us back almost 2 years, in December 2020, at the start of the bull run.