{"id":27182,"date":"2022-11-08T17:24:29","date_gmt":"2022-11-08T11:54:29","guid":{"rendered":"https:\/\/coinswitch.co\/switch\/?p=27182"},"modified":"2022-11-09T12:46:28","modified_gmt":"2022-11-09T07:16:28","slug":"sol-takes-a-beating-over-asset-concerns-at-trading-firm-alameda","status":"publish","type":"post","link":"https:\/\/coinswitch.co\/switch\/news\/sol-takes-a-beating-over-asset-concerns-at-trading-firm-alameda\/","title":{"rendered":"SOL takes a beating over asset concerns at trading firm Alameda"},"content":{"rendered":"

Update: <\/strong>On 8 November 2022, Binance\u2014the crypto exchange led by Changpeng Zhao\u2014proposed to acquire rival FTX. The move comes amid the reported liquidity crunch as crypto firms and traders pulled money from FTX. The announcement initially propelled a dropping market\u2014with SOL crossing $30 within minutes of the news breaking out. However, the gains flatlined shortly. At the time of this update (9 November 2022), SOL is trading at $20.62 \u2014 down 4.62% in the past hour.<\/em><\/p>\n

This is a developing story. Please check back for more updates.<\/em><\/p>\n

\u201cEthereum killer\u201d Solana (SOL) fell by over 18% in a 24-hour span as concerns emerged over the quality of assets held by trading firm Alameda Research, a sister company of crypto exchange FTX.<\/p>\n

With losses for two consecutive days now, SOL is down by 10.81% at publishing time and was priced at $28.4. FTT, a token issued by FTX, also fell by over 18%.<\/p>\n

A brief background of the crisis<\/h2>\n

Alameda Research is a prominent trading firm and market maker founded by Sam Bankman-Fried, who is also the CEO of FTX. While the two businesses function independently, rumors abound over their close relations.<\/p>\n

Last week, a CoinDesk report revealed that Alameda held $14.6 billion in assets and $8 billion in liabilities. Significantly, the report said, of this $3.66 billion consisted of FTT tokens. FTT token holders get discounts on trading fees and other benefits on FTX.<\/p>\n

The \u201cPrivate financial document\u201d cited by CoinDesk further showed that Alameda held: $2.16b of \u201cFTT collateral\u201d, $292 million of \u201cunlocked SOL,\u201d $863 million of \u201clocked SOL\u201d, and $41 million of \u201cSOL collateral\u201d.<\/p>\n

In other words, the report suggested that much of the assets held by one of the largest market makers on FTX were illiquid and largely consisted of a token issued by FTX.<\/p>\n

In the words of Cory Klippsten, CEO of Bitcoin financial services firm Swan.com, \u201cAlameda business is actually FTX\u2019s own centrally controlled and printed-out-of-thin-air token.\u201d<\/p>\n

Soon after, Changpeng Zhao, CEO of Binance who is popularly referred to by the acronym CZ, tweeted his company will sell off all its FTT holdings as part of \u201cpost-exit risk management.\u201d The liquidation would be executed over the coming months to avoid a price crash. Binance was an early investor in FTX, and as a result of its exit from FTX equity last year, it was given $2.1 billion in cash equivalents, including BUSD and FTT.<\/p>\n

Alameda CEO Caroline Elison, in response, publicly offered to purchase all of Binance\u2019s FTT at $22. This, however, failed to calm the markets as FTT came under tremendous selling pressure. At one point, FTT crashed by over 30%.<\/p>\n

\"Alameda
Alameda CEO Caroline Elison’s response<\/em> <\/a><\/figcaption><\/figure>\n

How is SOL impacted?<\/h2>\n

As FTT began to take a hit, and concerns over Alameda\u2019s asset quality worsened, SOL tokens, curiously, began to fall rapidly. Speculations are that, in an attempt to defend FTT\u2019s value at $22, the trading firm was bulk selling the native token of the Solana network.<\/p>\n

For the record, FTX CEO Sam Bankman-Fried (SBF) said on Twitter that the exchange was far from being insolvent. \u201cFTX is fine. Assets are fine,\u201d he tweeted. Alameda CEO Elison suggested in a tweet that \u201cbalance sheet info that has been circulating recently\u201d does not give the full picture of the assets held by the trading firm. \u201cThat specific balance sheet is for a subset of our corporate entities, we have > $10b of assets that aren\u2019t reflected there,\u201d she said.<\/p>\n

\"SBF's
SBF’s tweet in response to FTX insolvency speculation<\/em><\/a><\/figcaption><\/figure>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Update: On 8 November 2022, Binance\u2014the crypto exchange led by Changpeng Zhao\u2014proposed to acquire rival FTX. The move comes amid the reported liquidity crunch as crypto firms and traders pulled money from FTX. The announcement initially propelled a dropping market\u2014with SOL crossing $30 within minutes of the news breaking out. However, the gains flatlined shortly. […]<\/p>\n","protected":false},"author":70,"featured_media":27183,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_ayudawp_aiss_exclude":false,"footnotes":""},"categories":[7701],"tags":[6467,6536],"class_list":["post-27182","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-crypto","tag-news"],"acf":{"json_ld_schema":"\n[{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"@id\":\"https:\/\/coinswitch.co\/switch\/us-stocks\/wall-street-jottings\/#FAQPage\",\"headline\":\"Wall Street jottings: A personal, guided tour to investing in US stocks\",\"keywords\":\"Personal Guide, US Investing, \",\"datePublished\":\"2022-07-22T13:28:55+05:30\",\"dateModified\":\"2022-09-19T19:04:28+05:30\",\"dateCreated\":\"2022-07-22T13:28:55+05:30\",\"author\":{\"@type\":\"Person\",\"name\":\"Akumbenla Jamir\",\"description\":\"\",\"url\":\"https:\/\/coinswitch.co\/switch\/author\/akumbenla\/\",\"sameAs\":[],\"image\":{\"@type\":\"ImageObject\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/38aea2873be2850fa7502413626eea19?s=96&d=mm&r=g\",\"height\":96,\"width\":96}},\"image\":[{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/coinswitch.co\/switch\/us-stocks\/wall-street-jottings\/#primaryimage\",\"url\":\"https:\/\/coinswitch.co\/switch\/wp-content\/uploads\/2022\/07\/Wall-Street-Jottings.jpg\",\"width\":\"1800\",\"height\":\"1080\"},{\"@type\":\"ImageObject\",\"url\":\"https:\/\/coinswitch.co\/switch\/wp-content\/uploads\/2022\/07\/Wall-Street-Jottings-1200x900.jpg\",\"width\":\"1200\",\"height\":\"900\"},{\"@type\":\"ImageObject\",\"url\":\"https:\/\/coinswitch.co\/switch\/wp-content\/uploads\/2022\/07\/Wall-Street-Jottings-1200x675.jpg\",\"width\":\"1200\",\"height\":\"675\"}]}]\n","json_ld_custom_schema":"","youtube_vodeo_url":"","seo":{"title":"","keywords":"","description":"","canonical":""},"blog_banner_image":false,"blog_coin":false,"download_the_app":{"button_value":"","button_url":""},"twitter_card":{"twitter_title":"","twitter_description":"","twitter_link":""},"maturity_tag":"","post_author":false,"guest_author":false,"hide_toc":false,"select_disclaimer":"Article Default Disclaimer","key_takeways":false},"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts\/27182","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/users\/70"}],"replies":[{"embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/comments?post=27182"}],"version-history":[{"count":8,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts\/27182\/revisions"}],"predecessor-version":[{"id":27220,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/posts\/27182\/revisions\/27220"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/media\/27183"}],"wp:attachment":[{"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/media?parent=27182"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/categories?post=27182"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinswitch.co\/switch\/wp-json\/wp\/v2\/tags?post=27182"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}