Topline
The price of bitcoin fell below $20,000 on Monday—dropping alongside other major cryptocurrencies—amid concerns about the financial health of FTX, one of the world’s largest cryptocurrency exchanges, a day after competitor Binance announced it would dump FTX’s token.
FTX CEO Sam Bankman-Fried accused Binance CEO Changpeng Zhao of trying to go after his company with … [+]
Key Facts
Early on Tuesday morning, bitcoin prices stood at $19,722, down more than 5% compared to the previous day, while Ethereum fell more than 6% to $1,482.
Tuesday’s crash in crypto prices follows a massive outflow of tokens from FTX in the past 24 hours amid fears that the popular crypto exchange may be insolvent.
Concerns about FTX’s health emerged on Sunday after Binance CEO Changpeng Zhao announced his company would liquidate its holdings of FTX’s FTT token “due to recent revelations.”
A day later, FTX CEO Sam Bankman-Fried shot back at Zhao on Twitter saying a “competitor is trying to go after us with false rumors,” adding that FTX and its assets are fine.
The price of the FTT token, which Binance began dumping on Monday, has dropped 23% to $17.33 in the past 24 hours.
Crucial Quote
Bankman-Fried ended his exchange with Zhao by tweeting: “I’d love it, [Changpeng Zhao]
, if we could work together for the ecosystem.”
Key Background
Although Zhao did not provide details about the “recent revelations” he was likely referring to, a report by Coindesk from earlier this month. The report found the majority of Alameda Research’s—the trading firm founded by Bankman-Fried—assets are made up of FTT tokens which are controlled and minted by FTX. At the time the Coindesk report was published, FTT’s price was above $25 and since then the token’s market cap has fallen more than $1.1 billion. After Zhao’s announcement, Alameda Research CEO Caroline Ellison offered to buy all of Binance’s FTT tokens at a price of $22. Ellison also argued that the Coindesk article did not share the complete picture as the balance sheet it had seen was only for “a subset of our corporate entities,” adding that Alameda had more than $10 billion in assets that aren’t reflected on those sheets.
Forbes Valuation
We estimate Sam Bankman-Fried’s total net worth to be $16.8 billion, while Changpeng Zhao’s is $17.4 billion.
Further Reading
Divisions in Sam Bankman-Fried’s Crypto Empire Blur on His Trading Titan Alameda’s Balance Sheet (Coindesk)
Billionaire Changpeng Zhao’s Binance To Offload All Remaining FTT Tokens Of Sam Bankman-Fried’s FTX (Forbes)
Source: https://www.forbes.com/sites/siladityaray/2022/11/08/bitcoin-falls-below-20000-after-twitter-row-between-billionaire-crypto-executives-triggers-withdrawals-from-ftx/