Things are not over yet, the market is consolidating FUD, what other bombs have not exploded?
FTX has become the epicenter of the market downturn, with cryptocurrency industry players rushing to distance themselves, stating that they have no business dealings with FTX or Alameda.
Table of Contents
Crypto Companies Clarify Their Positions
Tether: Zero Holdings
Tether's CTO, Paolo Ardoino, clarified that they do not hold any assets related to FTX or Alameda. While Alameda has redeemed a large amount of USDT in the past, there are no concerns about credit risks. He mentioned that those looking to spread FUD can look elsewhere.
Circle Founder: Zero Holdings
Jeremy Allaire emphasized that they have never provided loans to FTX or Alameda and have never traded or held FTT.
Coinbase CEO: No Holdings or Plans to Buy FTX.US
In a tweet, Brian Armstrong stated that there are no holding risks with FTX, FTT, or Alameda, and they have no intention to purchase FTX.US. He emphasized that Coinbase operates differently and highlighted issues such as institutional conflicts of interest and misuse of funds.
Unless instructed by users, we do not touch user funds. If a user deposits one dollar, we custody one dollar, and users can withdraw at any time. We have never issued a platform token. This incident is expected to lead to stricter regulations, pushing crypto businesses and users towards offshore operations.
Additionally, in an interview with Bloomberg, he stated that there are no intentions to acquire FTX.US and hopes that FTX's financial situation will not negatively impact regulators' views on the crypto industry.
Note: Coinbase's stock price seems to have been affected, dropping by over 10%.
Market Impact and Analysis
Circle Founder: Lack of Clear Regulation Increases User Risk
Jeremy Allaire pointed out that the lack of clear regulation in the US increases risks for users and projects, leading them to lean towards developing outside the US.
He hopes that these CeFi crises will not taint distributed ledger technology and the decentralized future. He also hopes that lawmakers will act swiftly and cautiously, unlocking immense potential for the world.
degentrading KOL: Market Entering Deleveraging Phase Again
degentrading compiled a theory on Twitter, summarized as follows:
- CZ will acquire FTX but will not save Alameda.
- Alameda may have lent out billions of dollars to major lenders BlockFi and Genesis using FTT as collateral.
- Alameda will not be bailed out, and lenders will be burdened with a large amount of bad debt, similar to the 3AC incident repeating.
- If lenders go bankrupt, who are the savers?
- Solana and SBF-related tokens are expected to no longer hold any value for lenders.
Note: Genesis has denied holding any significant risk positions or platform tokens, but in the 3AC incident, Genesis also initially concealed the news.
dForce Founder: Regulatory Impact, Solana Ecosystem Crisis
Mindao Yang last night pointed out that this incident will have a significant impact on the Solana ecosystem. He stated earlier:
The existence of the Glass-Steagall Act makes sense. Most CeFi just masquerade as banks and unregulated hedge funds. The damage caused by the incident is immeasurable. The crypto industry has been trying to push for the most significant regulatory revolution, only to play a circus in front of Congress. There is nothing worse than this chaos.
Note: The Glass-Steagall Act, established in 1930, separated commercial and investment banking activities and further promoted the Federal Deposit Insurance Corporation in the US.
Lookonchain KOL: Analyzing Alameda's Potential Asset Sell-Off
Lookonchain estimated their on-chain assets to be around 222 million USD and warned investors to be cautious of potential sell-offs.
CoinDesk: FTX's Pre-Blowup Investment Projects
CoinDesk listed the projects and amounts FTX Ventures invested in before the liquidity crisis:
CoinMetrics: Alameda Survived 3AC Crisis with FTX's Help
Lucas Nuzzi, Head of Research at CoinMetrics, tweeted that Alameda faced a liquidity crisis in the second quarter due to 3AC and only obtained funds by using FTT as collateral.
This is why SBF has been masquerading as a generous savior in recent months and actively engaged in political actions to maintain FTT prices within repayment deadlines.
He speculated that Binance learned of this and announced the sell-off of FTT to cause its collapse.