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by JumpCrisscross 1318 days ago
FTX bet customer funds through the CEO’s hedge fund on an FTX token [1]. The token price fell when this was revealed [2].

The hedge fund, and thus FTX, had less money than they owed lenders and customers. FTX found a bail-out in Binance; otherwise everyone would have lost their money.

[1] https://www.coindesk.com/business/2022/11/02/divisions-in-sa...

[2] https://www.coindesk.com/markets/2022/11/08/ftt-plummets-as-...

1 comments

It isn't officially a bailout. They just said they intend to acquire FTX. But, once they look at the books they may backout out the deal, especially if most customers want to take their money out. What is the point of buying an exchange that has no customers?
> isn't officially a bailout. They just said they intend to acquire FTX

That's a bailout.

> once they look at the books they may backout

It's not a done deal. But the proposal is a bailout, through and through.

The point is the same reason why FTX bought all the smaller crypto firms that were about to collapse.

Preventing exposing the entire crypto currency ecosystem as fraud.