FTX’s Point of No Return Can Be Traced Back to This Tweet, Data Show
- Data pinpoints the zero hour of FTX empire’s collapse
- An offer to buy FTT became the target of opportunistic traders
This article is for subscribers only.
When did it go from grim to hopeless for Sam Bankman-Fried’s crypto empire? Many answers have been offered. One decidedly narrow one says it was the moment his second-in-command went on Twitter trying to prevent a plunge in the token FTT.
While the overall collapse was caused by much larger forces -- decisions that left Bankman-Fried’s businesses resting precariously on the coin, exposed to Binance chief Changpeng ‘CZ’ Zhao’s pledge to sell it -- zero hour came when Caroline Ellison offered to buy it all from CZ at a below-market price. That’s when market liquidity evaporated in an asset FTX had valued at around $5 billion a week earlier.