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> FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Why would Binance decline this opportunity? If FTX, Bina
by danrocks 4y ago
> FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price.
Why would Binance decline this opportunity? If FTX, Binance, and the market knew FTT would just crash, it sounds like a given that Binance should take advantage of the fixed price instead of losing hundreds of millions of dollars "letting the market decide".
- colinmhayes 4y agoBecause they wanted to create a liquidity crisis in FTX that would force FTX to sell itself for a discount?
- mikekoscinski 4y agoPresumably, it is more appealing to Binance to kill their largest competitor than it is to realize a return on a minority investment.
- oldgradstudent 4y agoIt depends on the fixed price offered by FTX. If FTX could pay the current market price, then they could have absorbed whatever Binance sold on the open market. They probably offered a deep discount.
- kgwgk 4y agoOr maybe they offered to buy it later (when?) at a price fixed today - discounted or not. If they don’t have liquidity (why?) they cannot buy it on the market.
- oldgradstudent 4y agoIlliquid means you can't sell your position without lowering the price significantly. It could be that you need time to sell, or it could be that no one is stupid enough to buy it. The former can be fixed with a temporary loan, the latter in bankruptcy court.
- kgwgk 4y agoAs discussed extensively elsewhere an “exchange” shouldn’t be in the business of having illiquid positions in the first place. But here we are, and I’m not sure if FTX was offering to buy with some favorable terms regarding the time of settlement in addition to a discount. They could have bought on the open market at the discounted price but they apparently didn’t…
- deleted 4y ago[deleted]