Why Crypto Prices Are Still Crashing and Will The Bleeding Stop Soon?
Crypto prices continue to crash after Binance pulled the plug on its proposed acquisition of FTX and the troubled exchange said it was facing bankruptcy unless it could raise $4 billion.
Meanwhile, the bitcoin price fell to as low as $15,597, but has since recovered 3.5% to trade at $16,350.
But stymie any prospect of an end to the turmoil soon is the mounting problems at Sam Bankman-Fried’s FTX exchange.
The Justice Department, the Securities and Exchange Commission and the Commodity Futures Trading Commission are are now investigating FTX and associated trading firm Alameda Research.
FTX Token (FTT) has now lost 88% of its value since the run on its deposits began earlier this week. Its exchange coin is currently trading at $2.63.
According to Bloomberg, on a call to investors prior to Binance walking away from the buyout deal, he reported that the company faced a shortfall of $8 billion and needed $4 billion to remain solvent going concern.
Explaining that he had “f—-ed up”, SBF pleaded for financial support from investors, saying that he would be “incredibly, unbelievably grateful”.
Investors in FTX include the great and the good of the U.S. investment banking and VC world, with names such as BlackRock, SoftBank, Sequoia and Tiger Global Management among its backers – they all face seeing their investments wiped out..
Apparently, SBF was insisting up to an hour before Binance nixed the deal that it was still on, as he sort to persuade investors to pony up cash.
But it was not to be, as CZ made clear on Twitter.
Holders of certain assets on FTX might still find salvation. For example Justin Sun, the founder and CEO of Tron, said the company was standing behind all holders of TRON tokens (TRX, BTT, JST, SUN, HT) on FTX:
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