4 ms·

> Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens

> Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Binance declined This makes absolutely no sense and is not how markets work. If FTX was actually willing to buy unlimited FTT at a given price, Binance could not have "crashed the price" by selling below that price — somebody would simply have bought at the Binance price and sold to FTT at their price. What seems more likely is that FTX extended that offer only to a small portion of the tokens that Binance wanted to sell (to maintain the fiction of their price).

cj 4y ago
My assumption when reading the quote was that it would be an off-market transaction. Similar to how stocks can be traded in Dark Pools outside of the regular stock market.
- hailwren 4y ago
  Their point is that if you have the money to buy $1.1B of something off market, you should also have the money to buy $1.1B of something on market. Any time someone posts an ask at or below $22, you simply fill the order.
  - rtpg 4y ago
    beyond the fact that the dynamics of saying "we'll take everything at a certain price up to $1.1B" will likely lead to much more than that showing up on the market and leading to a price crash anyways... I imagine that an off market transaction can involve things like not sending $1.1B in cash to the other person the same day.
    - eru 4y ago
      If you have enough assets, everything can show up, and you just buy them out.
- SantalBlush 4y ago
  It's describing an arbitrage opportunity. If person A wants to buy something for $5.00, and person B will only sell for $1.00, I stand to make $4.00 per unit by simply being a middleman for the transaction. Private or public markets, the arbitrage opportunity remains the same.
MrMan 4y ago
FTX was not actually willing to buy, they are suffering from reduced capital position so they were bluffing
- oldgradstudent 4y ago
  > reduced capital position Sounds like a euphemism to me.
boomerango 4y ago
Alternatively FTX was confident they could make the purchase given time, but did not have the funds on hand.
- boomerango 4y ago
  Moreover, you are assuming no one else decides to sell based… one could argue publicizing their plans was meant to encourage just that…
nimchimpsky 4y ago
csomar 4y ago
I think what happened is that the probably wanted to buy it with their balance sheet rather than $$ which explains why this is a liquidity crisis. Say they have a $2bn in value (crypto, company assets, etc...); they can't place market orders to buy the FTT on the open-market; but they can make an off-market deal with Binance to swap these assets.
headsoup 4y ago
I think maybe FTX just doesn't have the money and their bluff was called
norswap 4y ago
Another problem is the bank run that this narrative created.

cj 4y ago

My assumption when reading the quote was that it would be an off-market transaction. Similar to how stocks can be traded in Dark Pools outside of the regular stock market.

hailwren 4y ago
Their point is that if you have the money to buy $1.1B of something off market, you should also have the money to buy $1.1B of something on market. Any time someone posts an ask at or below $22, you simply fill the order.
- rtpg 4y ago
  beyond the fact that the dynamics of saying "we'll take everything at a certain price up to $1.1B" will likely lead to much more than that showing up on the market and leading to a price crash anyways... I imagine that an off market transaction can involve things like not sending $1.1B in cash to the other person the same day.
  - eru 4y ago
    If you have enough assets, everything can show up, and you just buy them out.
SantalBlush 4y ago
It's describing an arbitrage opportunity. If person A wants to buy something for $5.00, and person B will only sell for $1.00, I stand to make $4.00 per unit by simply being a middleman for the transaction. Private or public markets, the arbitrage opportunity remains the same.

MrMan 4y ago

FTX was not actually willing to buy, they are suffering from reduced capital position so they were bluffing

oldgradstudent 4y ago
> reduced capital position Sounds like a euphemism to me.

boomerango 4y ago

Alternatively FTX was confident they could make the purchase given time, but did not have the funds on hand.

boomerango 4y ago
Moreover, you are assuming no one else decides to sell based… one could argue publicizing their plans was meant to encourage just that…

nimchimpsky 4y ago

csomar 4y ago

I think what happened is that the probably wanted to buy it with their balance sheet rather than $$ which explains why this is a liquidity crisis. Say they have a $2bn in value (crypto, company assets, etc...); they can't place market orders to buy the FTT on the open-market; but they can make an off-market deal with Binance to swap these assets.

headsoup 4y ago

I think maybe FTX just doesn't have the money and their bluff was called

norswap 4y ago

Another problem is the bank run that this narrative created.