There is a non-zero probability that the Acquisition Proposal that binance is put on the Table to bail out FTX to acquire it will Not succeed because it will fail due Diligence okay things are happening and Things are happening fast Charles Hoskinson In that clip you just saw was Right binance will no longer buy FTX Because FTX did not pass binance's due Diligence and that means FTX is Insolvent right now with no buyer also Sandbankment freed CEO of FDX has filed For bankruptcy and personally personally Owes lenders over 650 million dollars Welcome back everybody to altcoin daily Where you subscribe for one video per Day demystifying this cryptocurrency Market in these last few days we've kept You abreast on exactly what's happening Right now if you're not caught up I'm Going to link yesterday's video down Below binance's insane master plan how They just destroyed FDX great video seek It out a good summation of where we are Thus far but like I said today things Have changed Binance just tweeted this as a result of Corporate due diligence as well as the Latest news regarding mishandled Customer funds and alleged U.S agency Investigations we have decided that we Will not pursue the potential Acquisition of fdx.com of course U.S
Agency investigations refers to the SEC And cftc probing everything that Happened in these last 72 hours I guess Binance didn't want the headache they Wanted no part of SEC oversight of their Buyout they continued by tweeting this In the beginning Our Hope was to be able To support ftx's customers to provide Liquidity but the issues are beyond our Control or ability to help Every time a major player in an industry Fails retail customers will suffer we Have seen over the last several years That the crypto ecosystem is becoming More resilient and we believe in time That outliers that misuse user funds Will be weeded out by the free market as Regulatory Frameworks are developed and As the industry continues to evolve Towards greater decentralization the Ecosystem will grow stronger Wow the FTX situation might be a lot Worse than many in crypto thought and The reason this is so scary to people is The potential contagion this could cause Meaning yes FTX themselves are insolvent And if it was just this individual Company that would suck but it would be Contained the issue is how many loans How much debt did they take out with Other companies that now those other Crypto companies will never get back Also how many assets does FTX have left That'll probably be forced to sell on
The open market in bankruptcy court or To make their investors or users whole Let me share with you all of ftx's Holdings the Sam coins that we know thus Far why Solana is tanking why Salon is Being unstaked as well as ftx's biggest Investors that will be hit hardest by This but first very quickly let's break Down how big how much debt how deep this Potential Alameda FTX contagion could go Again if you don't know what Alameda is Or you want a deeper explanation on Their relationship check out yesterday's Video that's sort of The Beginner's Guide but today let's return to Aluminous balance sheet the Incriminating Revelation from coindesk Was that a plurality of alameda's assets 5.8 billion of a 14.6 billion reported Were in ftx's own exchange token ftt now Worth almost nothing as well as the Other large majority of the rest were in Solana ecosystem tokens Sam bankman Freed was a heavy backer of the salon Ecosystem and this starts the problem As with other exchange tokens owning and Staking ftt offer certain benefits to Traders on the FTX exchange discounted Trading fees access to airdrops free Withdrawals VIP access yet another key To ftt's design is that one-third of Ftx's own trading Revenue was used to Purchase and burn ftt Supply the Equivalent of retiring shares Sam
Himself promoted the weekly FDT buy from His own personal account so what that Means is that FTX was buying back shares Retaining the value of ftt in the market And then we'll learn that they used the Value of that ftt which they owned so Much of to then take loans from other People and use the FDT as collateral but The ftt had no real value because it was Impossible if they ever tried it would Have been impossible to sell it all at The same time ftt had remarkably low Circulating liquidity relative to Alameda and ftx's holdings in other Words e even if Alameda wanted to sell The 5.8 billion dollars of ftt they had There wouldn't be enough buyers Alameda's Holdings represented two to Three times more ftt's total circulating Supply now some may remember that Sam Actually cynically described this exact Token Dynamic to Matt Levine on an odd Lots episode hosted by the stalwart Crypto CEO accidentally describes Ponzi Scheme it's like he was showing us his Game plan the whole time and then here's How it all came crashing down Now the pieces are in place for FTX and Alameda to collude while retaining a Legal and legitimate seeming arm's Length relationship all using ftt as the Linchpin here's how it works FTX creates Ftt Alameda buys or pre-minds ftt at super
Low price FTX pumps ftt getting their token have a Higher value Alameda then posts ftt back to FTX as Collateral borrowing real assets from Ftx's customer deposits they give you a Token with no value ftt and they take Real Assets in exchange Both entities get to show Auditors they Have legitimate credit agreements and Claim a genuine arms-link relationship This is Alameda and FTX That's how the circular piggy bank Facilitates the transfer of customer Funds out of FTX into alameda's prop Trading business all while looking legit So how does this all break well the low Float and constant buy pressure from FTX Means the only thing that can make ftt Go down is if there was some huge Ex-genius ftt sale and this is where CZ Comes in two days ago now actually three Days ago CZ of binance announced he was Selling all of binance's ftt Holdings With over 500 million dollars letting Rampant speculation fly and only citing Recent Revelations as the reason for a Sale again we covered this in depth over The last three days and then of course Market cell pressure against ftt pushed The price down by morning on the 8th FTX Had paused all withdrawals of user funds And how that affects us all today is That now there's a seeming multi-billion
Dollar hole at FDX of which we thought CZ would be the one to bail him out Binance now has backed out they're Saying that the hole is much too deep For them to fill as well as they don't Want to be involved with the U.S Regulatory Agencies overseeing them Meaning nobody's coming to save us Nobody is coming to save FTX as of today CZ just tweeted this a couple minutes Ago sad day tried but crying How this affects you and me as crypto Holders A sea of red the market appears to be in Free fall right now because of the Uncertainty that this contagion may Bring so let's go over exactly which Other cryptos and companies that we know Of have been affected not just fdx's Token Solana price nukes 40 along with Other Sam tokens we know that Seoul is Dumping also similarly serum a Decentralized exchange asset functioning Autopsy so on a blockchain sort of like The uniswap only for Solana crashed by Over 55 percent in the same period also Ren a decentralized custodian project Witnessed a similar drop in valuation of Its native token also called ran Overall Sam tokens including radium bone Fighter and maps have dropped an average Of 40 since November 6th and why well The fear is that if FTX or Alameda still Holds these tokens
They're going to be selling anyway they Haven't already to to try and get Whatever funds they can Also corporations are on the line are in The red now because of this Robin Hood Down 20 percent FTX currently holds 56 Million shares of Robinhood stock and Unfortunately another L to Mike Novograts founder of Galaxy digital Galaxy digital discloses 77 million Dollars in exposure to FTX now 48 Million of that is likely locked in Withdrawals meaning they try to withdraw They got locked out so they may get this Back they may not this exposure Represents a small fraction though of The firm's over 1.5 billion on liquidity And this brings us to the big issue Stakers on the Solana Network are trying To as fast as they can on stake nearly One billion dollars of Solana is set to Be unstaked in 24 hours and this is Directly because of Sam Beckman Freed's Failure Solana validators are scheduled to Unlock 49.6 million sold almost a Billion dollars when the current Epoch Ends in less than 24 hours representing 13 percent of the coin Supply now don't Get too bogged down by the word Epoch Think of it just like blocks Bitcoin Network the miners mind blocks Solana Has epochs Solana epochs refer to a time Period usually two days when validators
Lock in their stake on the network also Though validators can choose to unlock Their stake at the end of each Epoch too The current Epoch ends at the end of the Day and the number of tokens being Unstaked increased from a measly 18 Million tokens now over 47 million Soul Tokens meaning that the increase likely Indicates that more validators are Choosing to remove their stake tokens From the network again doesn't mean that Solana is dead it just means there's a Lot of fear uncertainty and doubt in the Network especially in this bear Market I Would guess these stakers would go to Other l1s at least for the short term Other crypto firms were quick to deny Any exposure to FDX sambangman freed Brian Armstrong of coinbase making his Lack of exposure clear as well Coinbase doesn't have any material Exposure to FTX or ftt and no exposure To Alameda I think it's important to Reinforce what differentiates coinbase In in a moment like this Event appears to be the result of risky Business practices including conflicts Of interest between deeply intertwined Entities and misuse of customer funds Lending user assets it is very possible That Sam bankman freed goes to jail on This after all much like the Lehman Brothers situation even though Interestingly not many of those Bankers
Went to jail at that time but Sam Bangman freed has had his own little Lehman Brothers moment the day before Saying a competitor is trying to go After us with false rumors FTX is fine Assets are fine he then deleted this 24 Hours later assets were not fine but Just looking at ftx's valuation going From their last series C FTX had a lot Of investors This is research From the Block and we Can see as of their last valuation or The last series BNC BlackRock was Investor Sequoia Capital investor the List obviously goes on very important For you have the Bell notifications Turned on as the story develops I'll Keep you updated but like always see you Tomorrow