Best Twitter threads of the day – November 8th

1) Hey all: I have a few announcements to make.

Things have come full circle, and https://t.co/DWPOotRHcX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).

— SBF (@SBF_FTX) November 8, 2022

2) Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that.

— SBF (@SBF_FTX) November 8, 2022

3) But the important thing is that customers are protected.

— SBF (@SBF_FTX) November 8, 2022

4) A *huge* thank you to CZ, Binance, and all of our supporters. This is a user-centric development that benefits the entire industry. CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.

— SBF (@SBF_FTX) November 8, 2022

5) I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands.

— SBF (@SBF_FTX) November 8, 2022

6) (Note that https://t.co/fCrWGQ4y7w and https://t.co/Ju8CkfrLYH–two separate companies–are not currently impacted by this. https://t.co/fCrWGQ4y7w’s withdrawals are and have been live, is fully backed 1:1, and operating normally.)

— SBF (@SBF_FTX) November 8, 2022

This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.

— CZ 🔶 Binance (@cz_binance) November 8, 2022

There is a lot to cover and will take some time. This is a highly dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time. We expect FTT to be highly volatile in the coming days as things develop.

— CZ 🔶 Binance (@cz_binance) November 8, 2022

Stay #SAFU. 🙏

— CZ 🔶 Binance (@cz_binance) November 8, 2022

Here's the 30 second summary of the FTX drama that is blowing up in crypto.

1/ How FTX (a multi billion dollar co) almost died overnight

2/ And why this is a god tier strategic move by @cz_binance

— Shaan Puri (@ShaanVP) November 8, 2022

OK so it starts years ago. Binance was an early investor in FTX

— Shaan Puri (@ShaanVP) November 8, 2022

They started as friends, now competitors.

Binance #1
FTX #2
(coinbase and others are smaller)

Binance decides to sell it's stake in FTX.

As part of the buyout, they agreed to take $2B of it in "FTT" — a token that FTX created that it uses for trading fees.

— Shaan Puri (@ShaanVP) November 8, 2022

Two days ago, CZ comes out and says SBF has been talking sh*t about them to regulators

lobbying in a way that would hurt binance

So he announces publicly on twitter to his 7M followers that he's going to DUMP his entire $2B FTT stash

— Shaan Puri (@ShaanVP) November 8, 2022

Anyone holding FTT knows this is bad news.

$2B of sell pressure would crush price

So they start to panic sell

Price of FTT drops like 15-20% overnight.

Nobody wants to buy FTT (too risky, a whale is about to dump) and everyone wants to sell. Number go down.

— Shaan Puri (@ShaanVP) November 8, 2022

Enter Alameda – the hedgefund/market maker Sam started before FTX

They are kings.

But news leaks showing the emperor has no clothes

They have ~$12B in assets, $7b ish in liabilities…but half their "assets" are in FTT token

which is plummeting & illiquid

Alemeda might die

— Shaan Puri (@ShaanVP) November 8, 2022

If alemeda is in trouble, FTX might be too.

They are sorta sister companies. Market makers on FTX. And possibly hold/trade customer deposits. The relationship has been unclear for years. (achilles heel?)

— Shaan Puri (@ShaanVP) November 8, 2022

But most people think of FTX as a blue chip company. Sam is famous. He's a genius right?

They wait for he or alemeda to show they are in good health

*narrator* but they were not in good health

— Shaan Puri (@ShaanVP) November 8, 2022

Sam tweets saying everything is "fine"

but it feels to all of crypto like a girlfriend saying "i'm fine"

but she's not fine. https://t.co/hHpnQgtgti

— Shaan Puri (@ShaanVP) November 8, 2022

Alemeda's CEO comes out and says they will "happily" buy the FTT token as it plunges

But something tells us that it's not so happy, even with the exclamation mark https://t.co/Bzcj129d7p

— Shaan Puri (@ShaanVP) November 8, 2022

24 hours pass

if they had the financial strength, they would have shown it by now

This starts to feel like the "steady lads" moment right before luna collapsed pic.twitter.com/dersFBTHIb

— Shaan Puri (@ShaanVP) November 8, 2022

People freak out. start withdrawing funds from FTX

Ya know, just in case it collapses like celsius, blockfi, voyager, luna all did in the past year

$1B+ of withdrawals

FTX is facing a liquidity crunch

— Shaan Puri (@ShaanVP) November 8, 2022

More silence (wtf), withdrawls paused on FTX (double wtf)

— Shaan Puri (@ShaanVP) November 8, 2022

Then today – @SBF_FTX comes out and says they are entering a "strategic transaction" with binance

strategic transaction?

best code phrase since pic.twitter.com/ZTNlEjfg40

— Shaan Puri (@ShaanVP) November 8, 2022

CZ clears it up

"FTX was in trouble. We bought them to save them"

Binance basically started a rumor, made a threat, and ended up buying its biggest competitor overnight.

magnus carlsen approves

— Shaan Puri (@ShaanVP) November 8, 2022

For now the drama ends

crypto crisis averted

if ftx failed…that would have been devestating for all of crypto

— Shaan Puri (@ShaanVP) November 8, 2022