A crypto nuclear bomb just went off - Binance buys FTX (part 1 of 3) - Crypto in Plain English - Episode 291 - by cryptohunt.it

A crypto nuclear bomb just went off - Binance buys FTX (part 1 of 3)

Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.

Today, a bomb of nuclear proportions went off in crypto land, and you probably saw the result all over the news: Crypto exchange Binance has agreed to buy competitor FTX. Crypto prices tanked like we haven’t seen in a while, and the internet was buzzing.

So - what makes this event so special? Let’s dig in over the next three days. Today: A quick recap of what happened.

In case you are not familiar with either one: Both Binance and FTX are large centralized cryptocurrency exchanges. They bring buyers and sellers together to make a transaction happen, in return for a fee. They are basically the online versions of the New York Stock Exchange, just for crypto.

The founders of both exchanges are somewhat famous among enthusiasts and come close to Elon Musk in Twitter fame. Changpeng Zhao, known as CZ, founded Binance. Sam Bankman-Fried, known as SBF, started FTX. Although Binance was the first investor in FTX years ago, the two of them have often gotten into public arguments on Twitter.

Just like they did the day before the big news dropped. Everything seemed fine, until it became clear that FTX was unable to process customer withdrawals, a problem called liquidity crunch. FTX simply didn’t have enough money to pay users who wanted out. Within a short amount of time, Binance’s CZ announced on Twitter that they entered into an agreement to buy FTX to help save customers’ deposits.

And if you think that seems sudden, we are right with you. Very few people saw this coming. And because of that, a ripple effect kicked in: FTX’s own token started to tank, and soon after the entire crypto market followed.

Sounds like a true crime story to you? To us it does. That’s why we’ll do some good old detective work and return tomorrow to explain what happened behind the scenes!

So, don’t forget to subscribe so you do not miss this series!

This podcast is produced by Cryptohunt.it the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, Design is done by Carmen Rincon and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.