Fazzaco Exclusive: FTX to Go Belly-up? A Timeline of What Happened

A lot of people were like, "Celsius collapse is one hellish catastrophe for the crypto traders, but like what they say, there is nothing worse after the worst has happened". Well, Sam Bankerman-Fried (SBF), the founder of FTX, has something to tell you: There is something worse on the way.

Fazzaco covered the story of how Binance backed out last minute on the FTX rescue after a corporate DD. Today, we learned that the Securities and Exchange Commission (SEC), the U.S regulator, is also probing the platform over mishandling of client funds; in addition, the Financial Services Agency of Japan (FSA) has requested FTX Japan suspend business orders. The regulator demands a suspension of crypto trading and client onboarding by the 10th of December 2022.

So now, let's back up a little bit and take a stroll down the timeline.

The FTX Timeline

On Nov. 2 according to a Coindesk report, the balance sheet of Alameda Research (SBF's trading firm) is full of FTX's token, FTT. The report suggested that while there was nothing per se untoward or wrong about that, it showed Bankman-Fried's trading giant Alameda rests on a foundation largely made up of a coin that a sister company invented, not an independent asset like a fiat currency or another crypto. The situation adds to evidence that the ties between FTX and Alameda are unusually close.

Nov. 6 Changpeng Zhao (CZ) of Binance announced to liquidate all FTTs on their books due to the recent revelations. That was about $2.1 billion USD equivalent in cash. In response, Alameda's CEO said they will happily buy it all from Binance at $22 at the same day.

Nov. 7 Due to the Alameda's FTT incident a few days back, a panic run was sparked. SBF responded on Twitter ensuring their investors, "FTX is fine. Assets are fine." He also claimed that FTX has over 1 billion dollars in cash, enough to cover all user assets.

Nov. 8 An FTX support employee confirmed in the company's official Telegram group that all non-fiat customer withdrawals are officially suspended. Star Xu, the founder of OKX, tweeted the same day against both Binance and FTX, "if unfortunately FTX becomes another LUNA, nobody in the industry can benefit from the accident including Binance." He hoped CZ could stop selling FTT and make a new deal with SBF.

Nov. 9 Truce signed? CZ of Binance tweeted that "to protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days."

Nov. 10 Binance announced that they officially abandoned the intent to acquire FTX. FTX (FTT), the token, plummeted more than 80% to below $3 in 24 hours in response.

Will the Collapse of FTX Affect the Industry Harder than Celsius Did?

At present, many spectators are not quite feeling the impact of FTX's fall than they felt the time when LUNA fell. Some assumed that the ripple of Celsius was way bigger. However, FTX is still yet to declare its bankruptcy. Once it did, we will presumably see depeggings, and withdrawal suspension might just spread across multiple crypto exchanges like COVID when capitulation occurs.