Sam Bankman-Fried, CEO of FTX, has lost 93% of his net worth and is no longer considered a billionaire. His net worth was said to have dropped from $16 billion to $991 million in a single day. This is due to the recent decline in the value of FTT, FTX’s native token.
FTX was the fourth-largest exchange by volume. Sam Bankman-Fried was also a significant midterm election donor and strongly supported crypto legislation. Because of its close ties to FTX and Alameda Research, FTT’s failure negatively impacted SBF.
Things began to go south for FTX after Binance CEO Changpeng Zhao declared that his cryptocurrency exchange would liquidate any FTX tokens (FTT) it possessed.
Zhao had hinted in a cryptic tweet on Nov. 6 that the exchange would be liquidating its FTT holdings due to “recent revelations” that have come to light. Zhao did not elaborate on these revelations.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ ???? Binance (@cz_binance) November 6, 2022
Following this news, the FTT token came under intense selling pressure, resulting in a massive price drop.
In a completely unexpected development, Binance announced that it would buy the floundering cryptocurrency exchange FTX. FTX CEO Sam Bankman-Fried and Binance’s Changpeng “CZ” Zhao tweeted about the planned acquisition on Tuesday, sparking immediate concerns about compliance with antitrust rules.
1) Hey all: I have a few announcements to make.
Things have come full circle, and https://t.co/DWPOotRHcX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).
— SBF (@SBF_FTX) November 8, 2022
Concerns about antitrust retaliation in the United States and other countries have been raised in response to the proposed sale of FTX’ to Binance amid worries about FTX’s stability.
Global regulators have the authority to halt major mergers if they believe they will reduce market choice. They also have strict laws prohibiting anti-competitive behaviour.
Following this, many people pointed out how Binance turned out to be FTX’s saving grace, as the exchange was on the verge of bankruptcy.
This was surprising because CZ declined an offer from Caroline Ellison, CEO of Alameda Research, who offered to buy Binance’s FTT holdings for $22 per token.
At the time of publication, FTT was down 71% and trading at $4.56. Notably, the token fell from a high of $19.51 to a low of $3.15 in the previous 24 hours.
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