The Flywheel Scheme | FTX & Alameda Research Rumor Causes FUD In The Community, FTT Token 10% Price Decrease & Binance Drops Holding | November 6 2022

1 min read

Rumors Circulate Of FTX (FTT Token) False Reports On Their Balance Sheet

I’m not a fan of spreading FUD or panic but this topic might be more serious then people think. Nothing has been really confirmed yet and it’s a lot of rumors & speculations – yet better to stay up to date. We all know how fast crypto can freeze suddenly… (Mentioned a user reddit who described what might be possibly taken place with recently with FTX Crypto Exchange.)

The background:

FTX is one of the largest crypto centralised exchanges and has a good reputation. The platform has been launched in 2019 and with millions of registered users trading over 300 different crypto currencies.

However, just today some drama dropped and it’s getting worse every minute right now.

BINANCE Liquidating their FTT

r/CryptoCurrency - [SERIOUS] FTX rumors & securing your crypto
r/CryptoCurrency - [SERIOUS] FTX rumors & securing your crypto
FTT token falling close to the lowest point of the year
r/CryptoCurrency - [SERIOUS] FTX rumors & securing your crypto

others are warning as well:

r/CryptoCurrency - [SERIOUS] FTX rumors & securing your crypto
r/CryptoCurrency - [SERIOUS] FTX rumors & securing your crypto

But what exactly is going on?

First of all it’s important to mention that Binance is also a big centralized exchange. Both are competitors / rivals. Keeping this in mind is important when it comes to bias around the entire topic.

a simplified TL;DR of the CURRENT situation:

  1. FTX mints FTT and lends it to Alameda Research
  2. Alameda borrows USD stables against FTX
  3. Alameda send the USD back to FTX

The result is something called a “flywheel scheme”

r/CryptoCurrency - [SERIOUS] FTX rumors & securing your crypto

The problem: FTX & Alameda Research seem to hold ~ 8 Billion in FTT tokens like that. The catch? The market cap is only 3 billion. 5 Billion could potentially be false reported money on their balance sheet.

TL;DR : It’s a heated topic and all rumors but safe to say that something shady is going on in the background of FTX. Getting your crypto off exchanges that you don’t need anytime soon is always the safest way to secure your funds. We are in a nearly year long bear market and it’s safe to say that it’ll continue through at least early 2023. Better safe then sorry!

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