binance ftx

Crypto prices have continued to fall after the news that Binance has now backed away from the deal to buy FTX.

The FTX collapse has destroyed the markets

It seems that the team at FTX weren’t as solvent as was once believed, and Alameda actually went bankrupt around the same time as Three Arrows Capital. Rather than simply declare their losses though, SBF decided to bail out Alameda using customer funds at FTX.

Over the past 24 hours, Bitcoin has set new cycle lows to once again fall below $17k, and the price of FTX has now fallen over 90% in only a couple of days.

Binance pulls out of the acquisition to buy FTX

Binance offered to buy FTX, but only under the terms that they would first look at FTX’s books so that they could examine to see if everything was okay.

However, today it was announced that Binance have pulled out of the acquisition after examining FTX’s books.

It seems that FTX’s finances were not in good shape, with rumours that they are currently $6 billion in debt.

Even though the sale of FTX to Binance for $1 would have been tokenistic, Binance would also have been forced to cover FTX’s debts to make their users whole.

The issue is now that if FTX cannot raise a sufficient amount of capital from somewhere, there are no more buyers, and it seems highly unlikely that those who deposited to the FTX platform will be able to retrieve their funds.

Will SBF go to prison?

There has been a lot of speculation that SBF will likely spend some time in prison for the role that he had to play at Alameda and FTX.

By appropriating user funds to take directional bets on the market, there are many laws that SBF has broken.

Knowingly misleading his customers so that he could pump his own bags even further is fraud, and there will be many people who will rejoice in seeing him imprisoned for doing so.

This entire debacle is made even more ironic by SBF holier-than-thou attitude to the crypto space, and high degree of involvement in drafting new laws. Only weeks ago, SBF was campaigning for DeFi front ends to require KYC in order to benefit centralised exchanges, whilst at the same time he was spending his customers’ deposits.

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