The market is the most important thing for trading cryptocurrencies. This week, the cryptocurrency exchange FTX fell from grace when it ran out of money and let its competitor, Binance, buy its operations outside the United States. This looks like a bailout. People who talked to Bloomberg say that US authorities are now looking into whether or not FTX mishandled customer money while using its platform. Use bitql a great platform for crypto traders and investors.
Changpeng Zhao, the CEO of Binance, sent out a Tweet that shocked everyone in the cryptocurrency world. In it, he said that his company would be selling its FTT holdings because it had invested in FTX early on and held many of its tokens.
After that series of Tweets, many people with FTT tokens have been working hard to eliminate them. Zhao says that Bankman-Fried called him and asked Binance to help the struggling exchange.
Yesterday, both Binance and FTX said that Binance had signed a non-binding letter of intent that allows it to buy FTX after doing its research. This lets Binance be able to buy FTX. Problems are said to have come up during the due diligence phase, so it’s unclear whether the deal will go through.
Bitcoin was the most valuable cryptocurrency on the market when it was worth $19,750. This was the worst day for Bitcoin in about two months, and its price fell by 4% from its last price. Ether, the second-largest cryptocurrency, lost 5% of its value.
The person who made FTX, Sam Bankman-Fried, said that the worries were based on “false rumors” and that the exchange was “great.” When Reuters called the business on Tuesday, they didn’t tell them what was happening immediately.
Even though FTX is talked about a lot, it still needs to be clarified how the failure of the second-largest cryptocurrency exchange in the world will affect the industry as a whole because of the risk of infection. People are paying a lot of attention to other exchanges and hedge funds that have previously talked about their connections to FTX and Alameda.
The cryptocurrency community is turning into a group of “on-chain detectives” who want to discover if crypto exchanges are also mishandling their customers’ funds by trading with them and not keeping enough reserves. They also want to know which cryptocurrency exchanges are doing this. If their bank had fewer customers than FTX, they would not be able to handle it.
Will they build the FTX?
Some people said that Crypto.com would fail soon because of the cryptocurrency exchange. On-chain researchers found that Crypto.com sent $500 million worth of ETH that belonged to its customers to Gate.io “by accident.” Crypto(. )com says that this is what happened. There were many more ETH and stablecoins on the exchange before the uncertainty started than there are now.
CEO of CryptoQuant Ki Young-Ju says that between 25% and 80% of ETH reserves have been moved four times since September 2022. In the last seven months, the reserve of stablecoins went from $2.9 billion to $292 million, which is a 90 percent drop. Kris Marszalek, the company’s CEO, quickly replied that the ETH transfer had been made by mistake on October 21, more than three weeks ago. He also said that the money would be moved to a cold wallet in the next few days.
Gate.io and Huobi want to say something?
Strangely, the strange transfer from Crypto(.)com happened on October 21, just a few days before Gate(.)io’s “proof-of-reserve” came out. Because of this, cryptocurrency users have also tried to attack the exchange. Some say the PoR audit was already looked at on October 19. Still, the study was made public on October 28, which has caused some opponents doubtful.
People who use cryptocurrencies also don’t trust Huobi, based in Hong Kong. The biggest shareholder, Li Lin, said he would give customers up to $14 million in unsecured loans to pay off their remaining balances. Aside from this, Huobi seems to have some balance issues. When Huobi made the asset snapshot public, 10,000 ETH were sent to the deposit wallets of Binance and OKX. After that, there were 4,044 ETH in Huobi’s empty ETH wallet.
After big sell-offs, says the head on-chain analyst at Glassnode, there are usually a lot of FTX deposits on all three exchanges.