The entire saga between FTX and Binance might just come to an end. But with significant implications for the crypto market moving forward.
Earlier today, due to due diligence and the news report regarding mishandled customer funds, Binance is not moving forward with the acquisition of FTX.
Unless FTX US is part of the deal.
According to Blockworks, “Binance will not go ahead with the proposed deal to acquire FTX unless the US-based exchange partner FTX.US is part of the deal.”
Posted on Twitter, the largest crypto exchange shared their thoughts to “support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”
As seen with every major player in the industry falling, retail customers will suffer. This was evident in the UST LUNA crash and the 3AC diabolical.
But with every fall, crypto ecosystems tend to become more resilient, and the outliers who “that misuse user funds will be weeded out by the free market.”
As much as the crypto market is banging on CZ coming to the rescue, pain must be felt for the greater good of crypto.
The ecosystem will grow stronger as regulatory frameworks are developed as the industry continues to evolve toward greater decentralization.
While some are in disbelief at how things turned out, others got vocal about how the masterminds should be reprimanded.
If CZ can’t save FTX, who can?
I can’t think of any other players in crypto who can salvage the mess FTX created unless we look beyond it.
FTX customer deposits will likely see recovery in a bankruptcy court, which will take many years to pan out.
Those affected by Mt Gox still have not revived funds which tally up to almost a decade of waiting.
Investors who have their funds on FTX will likely take a step back from trading and reduce the number of trading exchanges they operate on. This will likely cause a fall in orderbook liquidity.
Especially with US CPI news coming out tonight, crypto might take another stab lower, capitulation is near.
The road ahead
The damage inflicted by 3AC created a hole of $3.5B. This hole FTX dug up is almost three folds that. The $10B is likely owned by big players.
It is not over; as cliche, as it sounds, it serves as a learning point for all.
Right now, there are two paths we can take.
Firstly, transparency. Take all your assets off exchanges until there are definite proofs of reserves. Taking transparency seriously will be an essential step to ensure crypto’s progress.
Secondly, regulation. Quote from CEO of Nansen, we need a “heavy-handed regulation, and we risk getting banks 2.0.”
Financial losses are not as bad as the loss of “time, purpose and trust in society.” The sentiment on the ground reflects tired legs as the market runs out of steam. From retailers getting hit the worst collectively to “founders are lying to the public blatantly and setting this industry back years to make a quick buck,” the only way out now is your own crisis management, and survival.
[Editor’s Note: This article does not represent financial advice. Please do your research before investing.]
Featured Image Credit: Chain Debrief