Before we could recover from the Twitter war between “Musk of the cryptocurrency world” Sam Bankman-Fried (SBF) and “the richest Chinese man” Zhao Changpeng (CZ), as of November 8, FTX suffered a $6 billion run in three days. Binance became the last straw for FTX, which was caught in a “death spiral”.

SBF, who was "hard-mouthed", still failed to prevent FTX from falling into a liquidity crisis and had to seek help from Zhao Changpeng's Binance. Zhao Changpeng later confirmed on Twitter that Binance was interested in acquiring FTX. Although the specific terms were not disclosed, SBF's $15.6 billion fortune is likely to be reduced to zero in the hands of his competitors.

According to statistics, before the acquisition on Tuesday, SBF held 53% of FTX shares, worth about $6.2 billion, and the hedge fund company Alameda Research he also held contributed about $7.4 billion to his personal wealth. SBF's total assets are about $15.6 billion.

According to Bloomberg's assumption, after SBF seeks to be acquired by Binance, all FTX investors will disappear due to Binance's acquisition, and the valuations of FTX and Alameda will instantly drop to $1. That is to say, SBF's total assets are now about $1 billion, which evaporated 94% in one day on Tuesday.

In January of this year, three funds including Softbank Vision Fund invested $400 million in FTX at a valuation of $32 billion, which undoubtedly aroused investors' broader concerns about the cryptocurrency market: If SBF, the "central bank of the cryptocurrency circle", is not safe, then who is safe?

Before the acquisition deal was announced, FTT had fallen from $25.9 to $17.97 during trading on Tuesday, a drop of more than 30% in 24 hours. After the acquisition agreement was announced, during the midday trading session of the U.S. stock market on Tuesday, FTT's decline in the last 24 hours narrowed to about 24%, and it was still the world's worst performing cryptocurrency on Tuesday according to statistics from the CoinMarketCap platform. Binance's token BNB rose by more than 12% in the last 24 hours.

The decline of cryptocurrencies widened, with Bitcoin, the most valuable currency, falling below $17,000 in late trading on the U.S. stock market, hitting a nearly two-year low since November 2020 and down nearly 20% from its intraday high.

SBF downplays dispute with Binance, says acquisition is beneficial to the entire cryptocurrency industry

SBF specifically mentioned the dispute with Binance when announcing the deal on Tuesday, saying:

I know there have been rumors in the media that our two exchanges are in conflict, however, Binance has repeatedly demonstrated their commitment to building a more decentralized global economy while working to improve (our) industry's relationship with regulators. We are in capable hands.

In the tweet, SBF also expressed his deep gratitude to Binance, Binance CEO Zhao Changpeng and all FTX supporters, saying:

The agreement with Binance is “a user-centric development that benefits the entire industry. Changpeng Zhao has done, and will continue to do, a phenomenal job in building a global crypto ecosystem and a freer economic world.”

The “battle” between Binance and FTX

Although SBF tried to downplay the dispute with Binance, their fierce battle had already caused an "earthquake" in the cryptocurrency circle.

Wall Street News mentioned earlier on Tuesday that the information disclosed by the cryptocurrency information website CoinDesk on November 3 earlier this month caused market concerns that the hedge fund Alameda Research founded by SBF would fall into bankruptcy crisis and FTX would fall into a liquidity crisis. After Binance claimed to liquidate more than 23 million FTX-issued tokens FTT, FTX reached a critical juncture of life and death.

CoinDesk said that FTT is the largest single asset in Alameda's balance sheet. Alameda holds about 140 million FTT, accounting for 70% of the 200 million FTT in circulation. Alameda's FTT-related assets are US$5.8 billion, accounting for 88% of its net assets.

Binance co-founder He Yi mocked FTX’s operations on November 5, saying:

Binance does not provide unsecured loans, does not participate in transactions, does not blindly buy companies, does not spend money on sponsorships, and 20% of FTX’s equity has been sold. We should keep our heads down in our work and be a man of integrity.

On November 6, Alameda Research co-CEO Caroline Ellison finally responded on Twitter that the balance sheet disclosed by CoinDesk was only part of the company's assets, and more than $10 billion in assets were not reflected. She also said that most of the loans had been repaid. She said:

Given the tightening of the crypto credit space this year, we have now repaid the majority of our loans, and we obviously have portions that were not disclosed by Coindesk.

SBF made a high-profile statement that everything was going well. Zhao Changpeng then posted a message saying that he was worried about the recurrence of Luna's "death spiral" and would sell all the FTT on the books. Alameda immediately said that it was willing to buy all the FTT that Binance was selling at a price of $22 per unit. However, many people doubted whether FTX could really come up with $580 million to buy back the tokens.