Events are unfolding fast as the cryptocurrency market is rocked again, this time by FTX. Facts and non-facts are hard to sort out under these conditions, especially since both seem to be depegged from believability at times. “Where’s the money?” and “Who’s to blame?” are popular talking points. Some of the information appearing is indisputably false, or at least highly speculative.
The situation has given rise to the opportunity to tell wild tales, such as this tweet that appeared (and disappeared) on Nov 10:
Rumors are not always harmless, as became clear when Tether experienced instability due to “evidence” that FTX and Alameda were trying to short the stablecoin. Tether denied having any exposure to Alameda or FTX.
The current status of withdrawals from FTX has also been a source of confusion, possibly because the status of withdrawals remains confusing in real life. FTX is not using “the normal process of queueing withdrawals,” an observer said, and there are a variety of potential causes.
Meanwhile, some FTX employees may not be receiving their salaries:
FTX CEO Sam “SBF” Bankman-Fried warned employees that they might have to wait, according to a leaked FTX internal communication. There is plenty of room for irregularity here, and at least one potential scandal arose, only to be quickly denied:
Bhavnani is the founder of decentralized finance protocol Rari Capital, which was hit by a $10 million hack last year.
In an informational environment of this type, it is tempting to think out loud and in public.
It may be reasonably assumed that the finger-pointing, self-justification and soul-searching has only just started. SBF has apologized profusely and publicly. Meanwhile, newly reelected Minnesota Representative Tom Emmer claimed “reports to my office” indicate SBF and Securities and Exchange Commissioner Gary Gensler were working together to “obtain a regulatory monopoly.”
Galaxy Digital CEO Michael Novogratz probably had a significant insight when he pointed to SBF’s magnetism and fashion sense.
“This is a tale as old as time,” Novogratz said. His company has $77 million of FTX exposure.