Crypto Three Things (11/10)

Thursday, Nov 10th 2022

Commentary

"Never use a token you created as collateral" - Changpeng Zhao 


1) FTX Facing Bankruptcy: Sam Bankman-Fried said his global crypto exchange FTX.com is staring at bankruptcy if it does not receive at least a $4B cash injection to cover an $8B shortfall. The acknowledgement of his firm’s troubles came after Binance scrapped acquisition plans, citing concerns about “mishandled customer funds.” On top of that, FTX is under intense investigation by the Securities and Exchange Commission.

Titan’s Takeaway: FTX seeking rescue financing is a tough pill to swallow for the entire industry. The white knight, stripped of his shining armor, is leaving behind ruins, destruction, and hundreds of questions that will need answers.

2) Alameda Bet FTX Loans: Alameda Research, the trading house founded by Sam Bankman-Fried, used billions of dollars belonging to FTX clients to fund risky bets on cryptocurrencies, The Wall Street Journal reported. Prior to its implosion earlier this week, FTX had more than $16B in customer assets, but had lent about $10B of them to its sister company Alameda. Earlier today, Bankman-Fried took to Twitter to announce the shutdown of Alameda Research.

Titan’s Takeaway: If Alameda traded billions from FTX’s client funds, we see why the crypto exchange had to halt withdrawals earlier this week when over $5B was requested for send-out. Its thin liquidity would’ve crunched and emptied all reserves.

3) Proof of Reserves Incoming: Crypto exchanges around the world are scrambling to publicly reveal their fund reserves in the heated mess that is now roiling the crypto industry. Small and big exchanges, among them Binance, Gate.io, Crypto.com, Huobi, Poloniex, and more, announced they will separately issue audited statements to show they are solvent.

Titan’s Takeaway: It’s a must to provide transparency amid the gripping fear of companies being secretly insolvent. With that fear eroding confidence in the crypto industry, users need to know their funds are safe.

Back to Research ↗

Learn with titan

Investment articles and resources

Become the smartest investor you've ever been through straightforward, easy-to-read investment articles.

How to Invest in Mutual Funds


What is Shorting a Stock?


Russell 2000: What Is It and Why It’s Important


What Is Hedging in Finance and How Does It Work?

Ready to become a client?

It’s time to give your wealth a future.

iOS

Android


© Copyright 2022 Titan Global Capital Management USA LLC. All Rights Reserved.