“Who needs Netflix when you are in crypto?” commented a user on Twitter as the crypto industry attempted to digest the acquisition of cryptocurrency exchange FTX by its rival Binance. The deal, disclosed on Nov 8., has been compared to a “chess move” by some, insinuating that Binance's strategy intentionally led to the deal.
Users on Twitter claimed that “CZ just executed the most gangster play we've seen in Crypto, ever, period,” referencing the series of tweets from Binance CEO Changpeng Zhao that triggered the acquisition.
The community also compared the move with Elon's Musk Twitter acquisition.
For a brief recap, in a Nov. 6 tweet, Zhao announced the decision to liquidate Binance's position on FTX token (FTT) was made after “recent revelations that have came to light,” citing “post-exit risk management" reasons.
FTX founder and CEO Sam “SBF” Bankman-Fried took to Twitter on Nov. 7 to claim that a competitor was trying to go after the cryptocurrency exchange with false rumors. FTX “assets are fine,” he said, stating that it had enough funds to cover all client holdings and does not invest client assets, even in treasuries. In the same thread, SBF also called for collaboration with rival exchange Binance.
As reported by Cointelegraph, the series of tweets triggered a sell-off of FTX Token that broke below the pattern’s support line near $22.50, accompanied by a volume spike. The sell-off continued below the support line, and the token is down over 57% in the past 24 hours, negotiated at $9.70 as of publication.
In a message to FTX's staff this morning, SBF said that $6 billion of net had been withdrawn from the platform in the past 72 hours, leading the exchange to “effectively pause,” adding that the situation would be resolved in “the near future,” according to reports.
On Nov. 8, both SBF and CZ announced the acquisition, citing a “liquidity crunch,” implying that Binance's equity liquidation led to FTX's insolvency. FTX's CEO chose to seek a “bailout from the competitor that triggered the bank run in the first place,” wrote a user on Twitter regarding the legal options the exchange had during the liquidity crisis.
The deal still depends on regulatory approval, and it is unclear whether antitrust concerns would arise from the deal.
Binance signed a non-binding letter of intention declaring its intention to buy FTX. Zhao added that Binance was “assessing the situation in real time" and had the ability "to pull out from the deal at any time."
NTT Docomo, Japan’s largest mobile operator with over $40 billion in annual revenue, partnered with multichain smart contract platform Astar Network to accelerate the Web3 implementation in the country. The joint effort will take the form of a consortium, which would give individuals and corporations the ability to utilize tokens for governance.
According to a press release from Nov. 9, Astar Network and NTT Docomo have also specifically agreed to collaborate on three fundamentals. They will pursue sustainable development by researching case studies for environmental issues in Web3, try to eliminate technology gaps on the road to wider Web3 adoption by educating people and provide opportunities for engineers and business leaders to learn and gain practical experience.
Astar Network CEO Sota Watanabe said the project’s mission is to bring Web3 out of a narrow tech-savvy circle to the general public:
“In this context, more robust cases with excellent user experience on an infrastructure that is accessible to everyone is essential. It is about making a society where more people can truly enjoy the benefits of Web3, not just engineers.”
Recently, Japan, which ones roughly one-third of Docomos’ shares, has been showing a growing interest in Web3, crypto and decentralized finance (DeFi). On Nov. 2, The Digital Agency of Japan launched a research decentralized autonomous organization to study Web3. In late October, the country’s second-largest port city, Fukuoka, partnered with Aster Labs to develop new use cases for Web3 technologies.
While the country still has rather tough crypto regulations, its prime minister is quite vocal on the government’s plans for major investment in Web3 and metaverse initiatives. The Japan Virtual and Crypto Assets Exchange Association has also promised to make it easier for authorized exchanges to list digital currencies by loosening the screening process.
Sam Bankman-Fried, founder and CEO of the troubled cryptocurrency exchange FTX, appears to have retracted his words about the safety of client holdings on FTX.
Bankman-Fried has deleted a Twitter thread where he tried to assure customers that FTX and the assets on the platform were “fine.”
FTX CEO took to Twitter to post the thread of four different tweets on Nov. 7, claiming that FTX had “enough to cover all client holdings.” Bankman-Fried also stated that the firm didn’t invest client assets and has been processing all withdrawals and “will continue to be.”
“We have a long history of safeguarding client assets, and that remains true today,” one now-deleted tweet said.
According to multiple sources on Twitter, FTX CEO removed his “assets are fine” thread on Nov. 8 at around 10:30 pm UTC, or a few hours after announcing a strategic transaction with Binance. As part of the deal, Binance agreed to acquire FTX in a move to help the troubled exchange overcome a “significant liquidity crunch.”
The acquisition news came shortly after several reports hinted that FTX had temporarily stopped withdrawals for the majority of coins. Many in the crypto community anticipated these events amid sluggish FTX withdrawals, concerns about the leaked balance sheet of FTX’s sister firm Alameda Research as well as Binance’s decision to liquidate its FTX Token holdings.
The community has been outraged about SBF opting to delete the tweets, with many blaming the FTX founder for “blatant lies” about the status of assets on the exchange.
One Twitter user, handle Pledditor, also pointed out that SBF previously retweeted a random account that implied an airdrop for those who don’t withdraw their coins from FTX. The crypto enthusiast suggested that the United States Securities and Exchange Commission needs to go after such actions, stating: “An implicit promise that SBF doesn't actually to be held accountable for because he himself did not tweet it.”
Some crypto observers aren’t too optimistic about the future events for FTX users that continue to store their holdings on the exchange. According to Dylan LeClair, senior analyst at UTXO Management, FTX customers are now unsecured creditors.
The FTX news triggered another massive crash on the crypto market that has already been already on the decline this year, with Bitcoin tanking to below $18,000. The total market value lost about 10% over the past 24 hours at the time of writing, according to CoinGecko.
This Daily Dose was brought to you by Cointelegraph.