No deal

Another dramatic turn of events as Binance bailed out from the FTX takeover, citing “news reports regarding mishandled customer funds and alleged US agency investigations”.

SBF is now scrambling to raise $8b to avoid bankruptcy.

With venture funds writing down their stakes in FTX to 0, one wonders what kind of risk-perverse investors would be willing to step in with billions of fresh funding at this point— but never say never in crypto.

Is Justin Sun an unlikely saviour? Or is his purported attempt to find a solution just a publicity stunt?

I wrote yesterday that CZ and Binance had probably passed the point of no return and could not “backtrack now without inflicting even greater collateral damage on Binance and the cryptocurrency industry in general”.

The further steep decline in the BTC price after the news broke of Binance walking away from the deal, proves that point.

That can only mean that Binance’s DD team found a black hole of unimaginable proportions once they started to inspect FTX’s balance sheet, and must have concluded that the risk to Binance of taking over the toxic waste of FTX was greater than the risk of walking away.

Given that CZ was evidently perfectly aware of the collateral damage his backtracking would inflict on the broader crypto market in this fragile hour — as well as the financial markets in general — that speaks magnitudes about how bad the mess at FTX is.

SBF certainly “f—ed up.”

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