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The FTX saga continues to create cascading problems for the entire crypto sphere, with deteriorating liquidity and market depth affecting not only crypto bigwigs such as Bitcoin and Ethereum but also altcoin heavyweights, including Solana’s SOL coin, Serum (SRM), and MAPS coin.
As most of our readers would know by now, FTX’s founder, Sam Bankman-Fried (SBF), ran a Ponzi scheme to the benefit of Alameda Research, the trading arm of his once-sprawling crypto empire. In essence, FTX transferred its native FTT tokens to Alameda at dirt-cheap prices while, at the same time, the exchange inflated FTT’s value by utilizing a part of its revenues to burn a fraction of the token’s circulating supply. Alameda then used its FTT tokens as collateral to borrow client funds from FTX, which were then used to place leveraged bets. This gig ended once Alameda’s exposure to the FTT token became public knowledge, prompting Binance to start dumping its own FTT stash, collapsing the token’s price in the process. This resulted in a bank run as clients tried to exit the Ponzi scheme-promoting exchange, eventually resulting in FTX declaring bankruptcy last week.
The collapse of Alameda Research is creating tangible problems for the crypto sector. After all, Alameda, along with Wintermute, Amber Group, B2C2, Genesis, and Cumberland,…
