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BREAKING: FTX has Become insolvent due to tx tokens crashed, FTX goes insolvent

The crypto market crashed recently

Let's talk about what happened

cryptocrash BTC

1) Binance invested into FTX early on and purchased a lot of FTX tokens

2) There were rumours that FTX heavily invested into FTX tokens and were using their own tokens as collateral to borrow money

3) Binance sold off their FTX tokens in a "risk reduction" move after what happened to Luna

4) This caused the price of FTX tokens to crash, as well as the rest of the crypto market

5) Now all of a sudden, FTX users cannot withdraw their crypto assets as FTX has now gone insolvent due to the price of FTX tokens crashing

6) Binance steps in on a non-binding agreement to take over FTX, and provide liquidity necessary for users to withdraw their funds

tl;dr, FTX purchased their own tokens and used them as collateral to borrow money, once their token crashed, they couldn't pay back their debts

This post is based on this twitter thread.

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