Crypto Saviour Sam Bankman-Fried Just Sought a Lifeline
Near-collapse of exchange shocks cryptocurrency market.
The world of crypto is usually volatile. Things got weirder a while back as the crypto saviour, Sam Bankman-Fried, aka SBF, reached for a lifeline. What happened and how? Read on to know.
Binance-FTX deal shocks crypto market
Crypto were down due to concerns regarding the solvency of FTX. For those unaware, it is an exchange platform founded by Sam Bankman-Fried, aka SBF. He’s an entrepreneur whose name also gets associated with words like “saviour,” “white knight,” and even “digital Warren Buffett,” among others.
Previously. SBF had dismissed rumours about FTX’s liquidity problems. At that time, the platform’s larger rival, Binance, stated that it would liquidate the $580 billion it held in FTX’s in-house token.
Now, things have changed considerably as Binance said it had offered to buy FTX to resolve its liquidity crisis. Zhao “CZ” Changpeng, the CEO of Binance, tweeted this on Tuesday “This afternoon, FTX asked for our help.” He also cited a “significant liquidity crunch.”
This was a surprise for all associated with the crypto world, as there has been enough public feuding and apparent bad blood between SBF and Zhao.
One prominent industry expert stated, “I’m actually shocked by this. FTX failing … would be kind of like a Lehman Brothers event for the space. But if they have been successfully bailed out, then that would probably head things off at the pass.”
If the deal happens, it will merge the two largest crypto exchanges by volume. It will also probably lead to a huge power shift in the industry.
After the news, there was a brief recovery in digital assets, but it didn’t mean much to the anxious investors. On Tuesday, Bitcoin tumbled more than 10% and reached a 52-week low of around $17,600. Also, FTX’s in-house coin FTT cratered to $5.24 and lost 75% of its value. Other digital assets and equities tied to the crypto industry, such as Coinbase, also fell.
The digital assets might remain volatile until more details about the deal are made public. Some analysts believe that the deal might also accelerate Washington’s push toward crypto regulation.
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