Crypto asset listings such as Bitcoin et al are under pressure after FTX, one of the industry’s biggest trading companies, faltered and an initial rescue attempt has now failed.
While the crypto world hasn’t completely burned down yet, it seems to be well on its way. In fact, the prices of Bitcoin, Ethereum et al. still under massive pressure. Reason: Binance has now announced that it will not “rescue” FTX, contrary to earlier statements of intent. And that, after the takeover, initially appeared to be an ideal solution to the liquidity problems of a competitor that had been struggling in recent hours.
Binance withdraws from deal with excuses
“As a result of the company’s due diligence, as well as recent reports of misappropriation of customer funds and alleged investigations by US regulators, we have decided not to proceed with the potential acquisition of FTX.com,” the world’s largest crypto exchange said. late Wednesday.
Binance founder Changpeng “CZ” Zhao seems to be getting nervous, as he and his comrades at the former rival say there’s a gap of $6 billion or more in liabilities and assets. In addition, regulation phobics probably won’t like the fact that American supervisors now want to deal intensively with the case. Authorities want to investigate whether FTX mishandled customer funds and what role various entities may have played in former FTX boss Sam Bankman-Fried’s crypto empire and eventual disaster.
How did the funds flow between the international and US editions of what until recently seemed to be a thriving company? And what was the role of Alameda Research’s notoriously aggressive business department? The dissolution of the agreement not only calls into question the future of FTX as one of the largest cryptocurrency trading platforms, but also heralds further upheaval for the entire industry, which has been reeling from one crisis to another for months. Observers fear that if a crypto company, of all things, which has been identified as a halo in the past, should fail, the entire movement’s existence will be at stake.
Marketing deals are probably at risk
In any case, the events of recent days have eroded Bankman-Fried’s purported wealth and political influence even more quickly than he has amassed in recent years. His net worth, estimated at a peak of $26 billion, has fallen by around 95 percent in record time. The man will soon have the unfortunate myth that he caused the biggest daily decline among billionaires in the corresponding index of the news agency Bloomberg.
Bankman-Fried’s status as the self-proclaimed ambassador of the crypto scene in Washington is now certainly in jeopardy. In recent months, he has championed a bipartisan Senate bill that would have given the Commodity Futures Trading Commission full oversight of activities in the field. Crypto freaks were against it. They considered the proposal too draconian and feared it would destroy their business models. For critics, on the other hand, it did not go far enough because it would not sufficiently protect consumers from all fraud.
Even various sports marketers may be wondering how to proceed. After all, crypto companies like FTX have been throwing around millions when it comes to marketing in recent years. The Miami Heat, for example, have a $135 million contract with FTX that includes the right to turn the team’s stadium into FTX Arena for 19 years. What seemed to be planned for eternity may now have a short half-life.