FTX comedy and might be another exchange that bites the dust?

[bbc.reporter]

Earlier today I stumbled upon Twitter thread that speculated Binance moved 23 million FTT tokens worth $530 million to their exchange with the obvious intention to sell it all, and just now I saw CZ tweet in which he confirms that indeed they decided to get rid off all FTT. Could it be that rats are already leaving the ship?


https://twitter.com/cz_binance/status/1589283421704290306?s=20&t=aaBCRda_K6sA-0n5k2Dfbg

CZ and Sam have been sharing passive aggressive tweets against each other. CZ's intention is certainly to destroy Sam's kingdom. I am also quite certain that CZ knows Alameda Research has borrowings collaterized with FTT. If the price of this continues to dump, those loans might get liquidated and cause another spiral of market dumps because the money from those borrowings might be invested in the cryptospace market through leveraged positions and market making.

My speculation is if liquidated, will it cause another dump similar to Luna's failure and 3 Arrows Capital's liquidation. This would certainly cause bitcoin to dump lower than $20,000 again.

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[Pmalek]

<Snip>

Good to know it's still working without KYC. In that case, they are lying about the requirements in the official documentation. If you check the source I linked to, you will see that everything matches with what I said in the previous post. Maybe the exchange was under regulatory pressure (like most CEXs) to implement KYC and they just did it on paper, while in reality there is still no need for it.

[NeuroticFish]

CZ's intention is certainly to destroy Sam's kingdom.

While FTX is still rather small, they had aggressive advertising and many have foreseen FTX as the one that will soon replace Binance as pretty much the top CEX around.
Of course that now, with FTT in trouble, CZ has found the best moment to liquidate his stash and cause even more problems to the competitor.
Will this destroy FTX? I don't know. But it will most probably show that its place is not on top.

[stompix]

Earlier today I stumbled upon Twitter thread that speculated Binance moved 23 million FTT tokens worth $530 million to their exchange with the obvious intention to sell it all, and just now I saw CZ tweet in which he confirms that indeed they decided to get rid off all FTT. Could it be that rats are already leaving the ship?

Hmm, does anyone have an estimate on the speed of those rats or an ETA on their evacuation?
There are still 3 weeks left till Black Friday and I don't want to miss it but at the same time, I don't want to spend the full price for a 1l per-minute popcorn machine that should would be needed when this happens.

With every day that passes the whole Defi/Cex/Stable coins/whatever shitshow is just getting worse, I was telling some a few years ago that we're sliding with those to things that match the whole WS manipulation, but now it's more and more like it, the whole crypto industry is starting to look more and more like traditional markets and unfortunately, the first things that resemble each-other are the bad things.

While FTX is still rather small, they had aggressive advertising and many have foreseen FTX as the one that will soon replace Binance as pretty much the top CEX around.

It might be small if we trust Binance numbers, but remember that CZ was the architect behind that incredible volume at OKCoin when everyone knew the numbers are fake, so how much of what Binance claims is true?

[NeuroticFish]

While FTX is still rather small, they had aggressive advertising and many have foreseen FTX as the one that will soon replace Binance as pretty much the top CEX around.

It might be small if we trust Binance numbers, but remember that CZ was the architect behind that incredible volume at OKCoin when everyone knew the numbers are fake, so how much of what Binance claims is true?

This is correct. On the other hand, I hope that you realize that the chances are slim that it's only Binance faking their volumes (and FSX is not). So I'd take absolutely every exchanges' volumes with quite a pinch of salt.
And just the fact Binance's shitcoin does much better than FTX's shitcoin tells that CZ must be doing something better than SBF, even if that's only the playing the smokes and mirrors game.


Edit: fixed typo

[o_e_l_e_o]

Something's certainly going down at FTX: https://nitter.it/BITCOINALLCAPS/status/1589403113412497408

Withdrawals not being processed and being staggered due to excessive congestion. Bear in mind this is exactly how the collapse of platforms like Celsius and Voyager started, all while their CEOs endlessly tweeted "FuNdS aRe SaFu".

Meanwhile, their coin is hitting both year low prices and year low amounts in reserve: https://nitter.it/ki_young_ju/status/1589396703421272064

If you have any coins on FTX, withdraw them immediately before you potentially end up losing everything like users of Celsius and Voyager did. If you are holding any FTT, time to sell it before there isn't enough liquidity for everyone and a bank run happens.

[DaveF]

Start rumor that bank is insolvent.
People run to withdraw funds.
Bank becomes less stable as they move funds to cover withdraws.
People see withdrawal delays.
More people panic and try to withdraw funds.

Not quite the same here, but that is kind of the point.

I don't trust centralized exchanges and neither should you, but because a competitor (with their own centralized token) is just not good business.

Are they going to implode, don't know and don't care. Neither should you, since you should not have any funds there or on any exchnage.

As for the delays, could be lack of funds, could be they don't have enough in their hot wallet and they have enough security in place that they need X number of people to move funds from cold storage and then they can only move X at a time. That's just good security.

-Dave

[dkbit98]

Good to know it's still working without KYC. In that case, they are lying about the requirements in the official documentation. If you check the source I linked to, you will see that everything matches with what I said in the previous post. Maybe the exchange was under regulatory pressure (like most CEXs) to implement KYC and they just did it on paper, while in reality there is still no need for it.

They are not lying anything in page you posted and you are not reading it correctly... in Tier 1 you don't need to send them any documents. Period.

It might be small if we trust Binance numbers, but remember that CZ was the architect behind that incredible volume at OKCoin when everyone knew the numbers are fake, so how much of what Binance claims is true?

Probably nothing is true, and CZ is well known as master manipulator, something like Chinese version of Elon Musk.
You don't get rich and wealthy like him, owning multiple business operating worldwide by being honest, especially not in public tweets

Withdrawals not being processed and being staggered due to excessive congestion. Bear in mind this is exactly how the collapse of platforms like Celsius and Voyager started, all while their CEOs endlessly tweeted "FuNdS aRe SaFu".

Withdrawal worked for me just fine yesterday, but I didn't have big amount of coins there, and now I have nothing there, so I am ok in case they collapse.
Everything looks scripted to me, as if Scam Bankman got tired of his crypto ponzi schemes 

[bbc.reporter]

CZ's intention is certainly to destroy Sam's kingdom.

While FTX is still rather small, they had aggressive advertising and many have foreseen FTX as the one that will soon replace Binance as pretty much the top CEX around.
Of course that now, with FTT in trouble, CZ has found the best moment to liquidate his stash and cause even more problems to the competitor.
Will this destroy FTX? I don't know. But it will most probably show that its place is not on top.

FTX is not rather small. Their latest fundraise was $400 million collected from venture capitalists and has given the whole company with the exchange included a valuation of $32 billion. We should not underestimate the effect of their insolvency on the cryptospace market because their hedge fund and market maker Alameda Research has a large amount of borrowed liquidity in the market. Their insolvency might dump everything to the low of June.



FTX Trading Ltd. ("FTX" or "the Company"), owner and operator of FTX.COM, today announced the closing of a $400 million Series C fundraise, increasing the valuation of the Company to $32 billion. The round saw participation from Temasek, Paradigm, Ontario Teachers' Pension Plan Board, NEA, IVP, SoftBank Vision Fund 2, Lightspeed Venture Partners, Steadview Capital, Tiger Global, and Insight Partners, among others.

The Company also disclosed that all investors involved in the Series C raise simultaneously participated in the previously announced FTX US Series A funding round, which valued FTX US at $8 billion.

Source https://www.prnewswire.com/news-releases/ftx-trading-ltd-closes-400m-series-c-round-301471084.html

[Pmalek]

They are not lying anything in page you posted and you are not reading it correctly... in Tier 1 you don't need to send them any documents. Period.

You are the one not reading my posts correctly. I never said you need to submit documents with level 1 KYC, did I? Here it is one more time in bold and bigger font:

To get a $2.000 per day withdrawal limit equivalent in crypto, you need to pass level 1 KYC. But they don't require the submission of scanned copies of identity documents.

You can argue that not submitting copies of personal documents and proof of address isn't proper KYC, and that's correct. Such documents are required for level 2 KYC. You can fill out fake info for level 1 KYC, and it will probably be accepted. But sooner or later, the need to submit copies of your real ID can become a thing for level 1 KYC as well. And when/if that happens, good luck explaining to the support why your initial data doesn't match with the info on your documents. All services hide behind their ToS agreements. Lying about who you are will certainly not go in your favor. 

[stompix]

Something's certainly going down at FTX: https://nitter.it/BITCOINALLCAPS/status/1589403113412497408
Withdrawals not being processed and being staggered due to excessive congestion.

One thing, if this kind of panic spread and everyone, like this guy:
https://twitter.com/dCliffb/status/1589416634934231040
goes back to his untouched 2 years old account to withdraw 5$ no company in the world will be able to process all those transactions and withdrawals in time.

Unfortunately seems that the consequences are the obvious ones, as panicked users that FTX might go down are dumping their coins to cash out in fiat, and then everyone will look at each other and say that wow, crypto is volatile when their headless chicken runs caused all this.

That being said, this fresh row of tweets isn't helping:
https://twitter.com/claire_FTX/status/1589384861777031169
https://twitter.com/FTX_Official/status/1589680515426443264
https://twitter.com/FTX_Official/status/1589689317034979329

If someone can explain the reason why they are posting these right now, I'm here to hear it!

FTX is not rather small. Their latest fundraise was $400 million collected from venture capitalists and has given the whole company with the exchange included a valuation of $32 billion.

When 400 million make your company worth 32 billion.
Nie, let me just go to Aldi buy a 40 euros carpet and raise my home value by 3200 euros.

[NeuroticFish]

FTX is not rather small. Their latest fundraise was $400 million collected from venture capitalists and has given the whole company with the exchange included a valuation of $32 billion. We should not underestimate the effect of their insolvency on the cryptospace market because their hedge fund and market maker Alameda Research has a large amount of borrowed liquidity in the market. Their insolvency might dump everything to the low of June.

It depends on what you compare. If you compare with .. I don't know, Gemini, FTX is BIG. If you compare with Binance, it's "rather small". This is how I see it. Of course, the reported volumes are fake, so it also depends on who is lying better.
Of course, FTX' fall can create quite some waves in crypto space, but I don't think that they'll fall. They may have some loses and difficulties, their shitcoin may become a bad dream, but, maybe with some help too, FTX will probably survive this.

I've read last evening something interesting: CZ has helped big time FTX in the past when it was a startup, that's where his FTT comes from. So the current move is a mix of getting rid of overly manipulated shitcoins and showing SBF where his place is in the order of things. FTX bankruptcy is not in the plans.

[Rikafip]

That being said, this fresh row of tweets isn't helping:
https://twitter.com/claire_FTX/status/1589384861777031169
https://twitter.com/FTX_Official/status/1589680515426443264
https://twitter.com/FTX_Official/status/1589689317034979329

If someone can explain the reason why they are posting these right now, I'm here to hear it!

I guess they want to show everyone that they are continuing with business as usual and that they have no issues whatsoever but looking at the comments under those tweets, I don't think that technique is working as people keep trolling them.

It depends on what you compare. If you compare with .. I don't know, Gemini, FTX is BIG. If you compare with Binance, it's "rather small". This is how I see it. Of course, the reported volumes are fake, so it also depends on who is lying better.

Since their volume is bigger than ~99% of the other exchanges, I would say that they are quite big and an important player on CEX market. After all, if they are so small there wouldn't be so much talk about them all over the place.

I've read last evening something interesting: CZ has helped big time FTX in the past when it was a startup, that's where his FTT comes from. So the current move is a mix of getting rid of overly manipulated shitcoins and showing SBF where his place is in the order of things. FTX bankruptcy is not in the plans.

Yeah, it is known fact that CZ invested in FTX in their early phase, but one thing is incorrect in that tweet: afaik, its not that Binance wanted to get out of FTX but instead Sam Bankman-Fried wanted Binance out of FTX.

[o_e_l_e_o]

Reports on Reddit that fiat withdrawals are also now being temporarily held on FTX.

So the current move is a mix of getting rid of overly manipulated shitcoins and showing SBF where his place is in the order of things. FTX bankruptcy is not in the plans.

More than a little concerning for everyone who uses centralized exchanges that another exchange can put your one on the verge of insolvency if they want to, though. Binance said they were going to sell over a 2 month period, so this dump isn't even from them selling yet. This all stems from a few tweets causing a bank run on FTX, because they are running a fractional reserve system, just like every other centralized exchange.

Imagine keeping your coins on an exchange and knowing that you could lose them all if some greedy billionaire tweets the wrong thing.

[NeuroticFish]

afaik, its not that Binance wanted to get out of FTX but instead Sam Bankman-Fried wanted Binance out of FTX.

That would make little sense (unless I'm missing something). This move from CZ sets quite a lot of pressure on both FTT and FTX. I see no reason SBF would want that now.

Imagine keeping your coins on an exchange and knowing that you could lose them all if some greedy billionaire tweets the wrong thing.

LOL, well said. There's never a dull month in the world of centralized crypto services

[Rikafip]

That would make little sense (unless I'm missing something). This move from CZ sets quite a lot of pressure on both FTT and FTX. I see no reason SBF would want that now.

Dunno, it kinda makes sense to buy out Binance if you plan to become one of their competitors, and I think that FTX certainly aims that. And its not that it happened recently, but almost year and a half ago. As for the reasons, this is what Sam Bankman-Fried said. Unless he is lying of course and it was the other way around.

We recently repurchased shares from Binance to buy them out of our cap table,” Bankman-Fried said. “I think it just makes sense given the role that our businesses are playing in the space. It can also give us more flexibility going forward.

Bankman-Fried says he and CZ “had a cordial conversation” about parting ways, and that both “had been expecting it would go in that direction for a little while, and now seems like a decent time to just go ahead and get it done. And obviously they did quite well on the investment as well, so I certainly think it's been a win for them

[o_e_l_e_o]

Does anyone want to explain to me exactly what these tweets mean:
https://nitter.it/FTX_Official/status/1589510761625554944#m
https://nitter.it/FTX_Official/status/1589790870290993152#m

Are they genuinely blaming their suspended BTC withdrawals on nodes not being able to keep up? With some mention of their node being "throughput limited"? So despite the network working is it always has, fees not being particularly high (and indeed the mempool being pretty much empty when they made that first tweet), this is all somehow nodes' fault and nothing to do with them? Am I missing something here or are they just throwing out nonsense jargon and hoping their users don't understand there is no such thing as making your node "process from both ends"?

Definitely nothing to do with the fact that they still have outstanding withdrawal requests to process, but their bitcoin wallets are already empty? https://cryptoslate.com/bitcoin-balance-on-ftx-exchange-goes-negative-coinglass/

[DaveF]

Does anyone want to explain to me exactly what these tweets mean:
https://nitter.it/FTX_Official/status/1589510761625554944#m
https://nitter.it/FTX_Official/status/1589790870290993152#m

Are they genuinely blaming their suspended BTC withdrawals on nodes not being able to keep up? With some mention of their node being "throughput limited"? So despite the network working is it always has, fees not being particularly high (and indeed the mempool being pretty much empty when they made that first tweet), this is all somehow nodes' fault and nothing to do with them? Am I missing something here or are they just throwing out nonsense jargon and hoping their users don't understand there is no such thing as making your node "process from both ends"?

Definitely nothing to do with the fact that they still have outstanding withdrawal requests to process, but their bitcoin wallets are already empty? https://cryptoslate.com/bitcoin-balance-on-ftx-exchange-goes-negative-coinglass/

*Not* defending them, but yes I can see they have some configuration settings in their node to prevent overrun.
The back end of their service talks to the node and they have a hard limit of how many pending TX it can have before the back end pauses, waits for a block and sends the next batch.

Once again, I could see someone pushing this in terms of security. YES, you can move everything in 1TX if you get access, but if you set a limit of 2 BTCthat you can send per TX now you have to create 50 of them to move 100BTC and add if the device that talks to the node only allows a certain number. It could in have prevented what has happened to services that have been compromised.

NOT saying that this is what is happening here, but looking at it from the oddball security point of view it's not that bad an idea. Not great mind you, just not bad.
And if the worst they ever had before was a few hours backlog sitting in the server nobody would have even noticed.

Never underestimate programmers doing odd things to see if they can get it done with less work.....

-Dave

[o_e_l_e_o]

The back end of their service talks to the node and they have a hard limit of how many pending TX it can have before the back end pauses, waits for a block and sends the next batch.

Which is a problem with their back end, not with network nodes, and claiming that "nodes are catching up" is disingenuous at best.

And given the problems they are facing, and the rumors circulating that they are on the border of insolvency, if this was the case then why wouldn't they just temporarily tweak their back end to send all withdrawal transactions straight to the network? Doesn't matter if they sit in the mempool for a few hours before confirming - at least the end users can see that FTX actually have the necessary bitcoin holdings to honor their withdrawal requests.

Letting their back end sit with a huge back log of withdrawals transactions it isn't broadcasting is just adding fuel to the fire and isn't doing them any favors. Unless, of course, they don't actually have the funds to process all these withdrawals.

[DaveF]

The back end of their service talks to the node and they have a hard limit of how many pending TX it can have before the back end pauses, waits for a block and sends the next batch.

Which is a problem with their back end, not with network nodes, and claiming that "nodes are catching up" is disingenuous at best.

And given the problems they are facing, and the rumors circulating that they are on the border of insolvency, if this was the case then why wouldn't they just temporarily tweak their back end to send all withdrawal transactions straight to the network? Doesn't matter if they sit in the mempool for a few hours before confirming - at least the end users can see that FTX actually have the necessary bitcoin holdings to honor their withdrawal requests.

Letting their back end sit with a huge back log of withdrawals transactions it isn't broadcasting is just adding fuel to the fire and isn't doing them any favors. Unless, of course, they don't actually have the funds to process all these withdrawals.

Because....wait for it....they don't give a shit.
And they may be insolvent.
And if not and on the off chance what I posted is accurate or close to accurate, they don't want to tell people how they do things.
And....wait for it....they don't give a shit.  
And, if they have other controls in place like I said before only X coins in the hot wallet then they need to refill before sending and they will get to it when they get to it.
And they may be hoping that if people are forced to wait they cancel their withdraw and keep the coins on the exchange.
And....wait for it....they don't give a shit.

Could be 1000s of reasons some good, some bad. Could also be deliberate, i.e. they are close to but not insolvent. They CAN ride this out, but with the rumors swirling once they are on the other side they can come out and say, yes we had controls to make sure nothing bad happened, and look we are still here and functioning with no issues. All is good. And we have a lot of funds left for us to keep running. [So long as $85 is a lot of funds]

However, now and forever.....not your keys....not your coins.

-Dave

So I was both right and wrong. A bit of insolvency and a bit of they don't give a shit. At a guess this was going on for a while, CZ wanted control they would not give it so he forced the issue.