The cryptocurrency market is nine years in crypto
today is the craziest day since I bought my first Bitcoin in 2013 this is crazier than Mount gox
this is much crazier than three Aero capital or The Luna debacle it's just shocking this morning
the cryptocurrency industry woke up to one of the Largest exchanges in the world appearing to have
stopped processing withdrawals and then CZ the CEO of binance the other largest cryptocurrency
Exchange in the world shocked the crypto industry By tweeting this this afternoon FTX asked for our
help there is a significant liquidity crunch to Protect users we signed a non-binding letter
of intent intending to fully acquire ftx.com And help cover the liquidity crunch we will be
conducting a full due diligence in the coming Days binance buying FTX is this true can anybody
else confirm this I mean it seems too outrageous To to be true and then Sam bankman freed tweeted
this hey all I have a few announcements to make Things have come full circle and ft acts's first
and last investor are the same we have come to an Agreement on a strategic transaction with binance
for ftx.com our teams are working on clearing Out withdrawal backlogs as is this will clear out
liquidity crunches all assets will be covered one To one this is one of the main reasons we've asked
binance to come in it may take a bit to settle we Apologize for that but the important thing is
that customers are protected a huge thank you To CZ and binance and all of our supporters this
is a user-centric development that benefits the Entire industry CZ has done and will continue to
do an incredible job of building out the global Crypto ecosystem and creating a Freer economic
world I know there have been Rumors in media of Conflict clicks between the two cryptocurrency
exchanges however binance has shown time and Time again that they are committed to a more
decentralized global economy while working to Improve industry relations with Regulators we are
in the best of hands note FTX U.S and binance U.S Two separate companies are not currently impacted
by this FTX U.S withdrawals are and have been Live is fully backed one to one and is operating
normally it's interesting that just 24 hours ago Sam bankman freed was tweeting this a competitor
is trying to go after us with false rumors FTX Is fine assets are fine so how did we get here
seems like CZ had a master plan this whole time CZ starves FTX of Revenue with zero trading fees
on binance attracting volume from FTX CZ shoots Headshot by publicly announcing ftt their token
ftx's token concerns causing a bank run on FTX And a decline in the ftt price FTX unable to
cover hole in their balance sheet CZ acquires FTX thanks for playing the cryptocurrency markets
are in serious trouble my friends I'm gonna get to That in a second before we get to that Sam bankman
freed was once admired as the king of crypto now Alameda and FTX are rumored to be on the brink
of insolvency and seemingly are here is how it All went wrong for Sam bankman freed and FTX how
do we get here for a long time as you recall Sam Bankman freed was idolized into space famous for
his Arbitrage trading founding FTX Alameda hugely Successful Investments like Solana Sama crude
an impressive estimated net worth of 10 to 14.5
Billion dollars at his peak in recent times FTX
has been extremely busy leading huge fundraising Rounds for new projects Aptos and sui are two
of the most recent examples Sam was invincible Despite Luna causing chaos he used the situation
as leverage to continue an aggressive expansion Plan bailed out block 5 for 240 million bid for
voyager's assets considered bailing out Celsius However in the background there were some cracks
starting to appear eyebrows started to raise when The CEO of Alameda suddenly resigned additionally
just a month later FTX president Brett Harrison Stepped down these resignations occurred just
before it was revealed that FTX was facing some Legal trouble in the form of Securities regulator
probe although public sentiment was becoming more And more negative towards Sam the dccpa draft
Bill marked the real turning point for the Public's perception a draft of the bill was leaked
first online see Sam seemingly supported the bill But despite Sam trying to play the good guy on
Twitter there were clear red flags through the Bill which could pose significant threats to defy
you remember Eric Voorhees famously quizzed Sam Bankman freed on his stance during the bankless
interview we played you this clip that this clip Went viral and led to continued skepticism amongst
the crypto Community towards Sam bankman free if That did mean that like essentially a suit front
Hands by Americans targeting American retail had To be licensed um I think that could be reasonable
if the question was let's let's acknowledge that The email protocol will be permissionless as
a protocol yep but it was the law of the land In America that every email front-end provider
required kyc from its users yeah because under The justification that we do not want people
sending information back and forth to terrorists Yep where would you stand on that position oh I'd
be strongly against that position why would I be Against it because I think that it I think it'd
be like against freedom of speech I think it'd Be disenfranchising a lot of people I think they
would not trust in practice that it would do a Good job so I agree with you on all that um I'm
making a distinction here between for instance Payments versus like derivatives contracts
why why is Ave somehow different than email so Um why is it different than email um you argued so
well and so passionately to not block email with Licensing and kyc I loved hearing that yep that
filled my soul with joy such good arguments why Does that not apply to financial transactions so
um why does it not apply to financial transactions Um I think there are a few
things here so first of all The public damage for Sam was immense sentiment
shifted as people realized his intentions may be Different from what we all first thought this
shift in sentiment was the precursor for what Was to come next and a major contributor behind
the severity of the recent thud concerns started A bubble on Wednesday when alameda's balance sheet
was leaked it revealed that the net equity in the Alameda business is actually ftx's own centralized
controlled and printed out of thin air tokens one Of the accounts that first called out the Celsius
collapse that same account published a report
Titled is Alameda insolvent the report labeled
Alameda situation as precarious to say the least Then we saw massive 500 million plus worth of ftt
token transferred to binance CZ confirmed that it Was in fact binance who executed this transfer we
got full confirmation that binance was exiting its Ftt position yesterday when cesy announced his
decision to liquidate any remaining ftt on their Books CZ then fired shots at Sam stating that they
were selling as a result of learning from Luna Sees the indirectly referenced Sam bankmanfried's
lobbying by claiming that he quote won't support People who Lobby against other industry players
behind their backs ftx's primary token ftt dumped As a result Caroline the CEO of Alameda research
was forced to then issue a response to cz's sale He says if you're looking to minimize the market
impact of your ftt sale Alameda will be happy to Buy it all from you today at 22. in my opinion
this response felt desperate and was somewhat Of a red flag before FTX halted withdrawals
today the flood surrounding FTX resulted in Staggering outflows as people rushed to withdraw
their funds the threat of a bank run was looming As some people were forced to wait four hours
to process their withdrawal today FTX appears To have stopped processing withdrawals and then we
heard binance has fully acquired FTX again I ask You was this cz's plan the whole time CZ starves
FTX of Revenue with zero trading fees on binance Attracting volume from FTX CZ shoots headshot
by publicly announcing ftt concerns causing a Bank run on FTX and a decline in the ftt price
FTX unable to cover holes in balance sheet CZ Acquires FTX and it's pretty obvious what the
hole was FTX lent Alameda 7 billion secured on Their own ftt and Solana illegal as hell Sam
bankman freed has a ton of questions to answer For this but CZ saw the opportunity and walked
away with everything and would not surprise me If the purchase price for FTX was Zero CZ
makes account holders hole solves liquidity Crunch maybe helps Sam bankman freed avoid
jail Sam bankman freed and Equity investors Get practically nothing probably not the most
popular opinion but regulations saved depositors On FTX us were there not a CZ or other bailout
for FTX International International depositors Would have likely lost their deposits U.S
deposits were fully backed one to one in Addition same day news CZ comes out and says this
all cryptocurrency exchanges should do Merkel tree Proof of reserves Banks run on fractional reserves
crypto exchanges should not binance will start to Do proof of reserves soon for full transparency
great to hear this is much appreciated and needed Full transparency of centralized entities
especially monolithic custodial exchanges is Exactly what is needed to put crypto at a higher
standard of quality and Trust than tradfi now Today also besides ftt going to hell besides
plenty of altcoins seeing heavy volatility Bitcoin also made a new yearly low just above 17
100. the worst might be right around the corner Anything can happen but let me tell you why you
should be worried contagion is here let me show You how we are completely effed FTX accepting the
bailout means that they effectively have a hole
In their balance sheet sure CZ will bail out FTX
but he's not going to bail out Alameda Alameda has Been going out and borrowing from all the lenders
via giving ftt as collateral CZ will probably let It go to zero and this means the lenders are
underwater they now own illiquid ftt and CZ is Perfectly happy to let it go to zero the second
biggest lenders block Phi and Genesis probably Have a 10 billion balance sheet how much of that
was lent to Alameda at least a few you Bill since Alameda is not being bailed out just FTX the
lenders of Alameda will have to absorb the Full hit but they just got wrecked by three Arrow
capital and the miners at this point I expect the Lenders to go under who deposited to them we are
going to see a credit contraction of at least 10 Billion dollars within the space expect all soul
and Sam coins to be dumped to Oblivion by lenders Trying to get any money back altcoin daily Army
this is a developing story make sure you subscribe To the channel we're gonna have so much more
to share with you tomorrow and throughout the Week as this is a developing story like the
video if you got value I'll see you tomorrow