Crypto M&A Web3

Web3 Weekly: FTX Stunner Only Proves Everything Can Change Fast In Crypto

This is a weekly feature that will look back at the week that was in crypto, blockchain and Web3, and offer insights and analysis. Check out last week’s here.

If you are a crypto investor hoping for a stabilization of the industry, Tuesday was not your day.

Crypto already has seen its share of tumult this year, but things seemed to hit a different level when tokens started sliding this week on concerns around FTX, the world’s fourth-largest exchange by volume.

Then, in about a day, the crypto world was turned upside down, as Binance CEO Changpeng Zhao tweeted the news his company would be buying — the non-U.S. exchange associated with FTX  — due to a “significant liquidity crunch.”

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The news wasn’t just noteworthy because it was the largest exchange buying one of its biggest competitors. It also is an illustration of how quickly things can change in a market already associated with a breakneck pace.

Don’t blink

Earlier this year, FTX raised $400 million at a $32 billion valuation. According to Crunchbase, the company has raised nearly $2 billion with investors that include the SoftBank Vision Fund, Singapore’s Temasek Holdings and Sequoia Capital. Zhao and Binance were early investors in FTX as well.

FTX CEO and crypto billionaire Sam Bankman-Fried had become one of the industry’s most dominant faces as he seemingly started a one-man crusade to help lead the market out of its crypto winter.

In June, it was reported that Bankman-Fried’s quantitative crypto trading firm Alameda Research provided a $500 million loan to Voyager Digital. Voyager filed for bankruptcy a few weeks later, and in September FTX put in the winning bid for the assets of the distressed lender.

It was even reported in June that Bankman-Fried may have his eye on buying asset trading platform Robinhood.

In July, FTX provided a $250 million line of credit to lender BlockFi which includes an option to buy. In a recent interview with CNBC’s Squawk Box, Bankman-Fried said the exchange giant has at least $1 billion to use on acquisitions and bailouts.

Now that same exchange giant — known for co-hosting its invite-only Crypto Bahamas four-day conference in the spring — faced liquidity issues before being bought by its biggest competitor.

Crypto moves fast … well, except for its long winters.

Further reading:

Binance Signs Letter Of Intent To Buy

Illustration: Dom Guzman

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