Author: Colin Wu

As CoinDesk exposed Alameda's financial data, although this matter has nothing to do with Binance, Binance's attacks have never stopped.

He Yi, the co-founder of Binance, said about the incident: "Binance does not give unsecured loans, does not participate in transactions, does not buy companies blindly, and does not spend money on sponsorships blindly. 20% of FTX's equity has been sold. Be a man and do things with your head up. .” Especially the first sentence, implying that FTX made a substantial unsecured loan to Alameda.

On November 6, it was reported that Binance address 0xd9...d7d7 transferred 23 million FTT (worth about 580 million US dollars) to FTX address 0x04...8379 for sale. According to Wu’s further on-chain inspection, the address 0xd9…d7d7 may be the receiving address for Binance’s investment in FTT to obtain linear unlocking, while the address 0x04…8379 also belongs to Binance as a transit for transferring FTT to Binance’s official wallet. Perhaps because all FTT shares have been unlocked, Binance transferred all FTT to the official wallet at one time.

On the evening of November 6, Alameda CEO Caroline responded that the specific balance sheet (disclosed by CoinDesk) is for a subset of our corporate entities, and we have more than $10 billion in assets that are not reflected there; Tighten up, we've now repaid most of our loans; we obviously have hedges that aren't listed. However, Caroline's simple reply did not respond to related transactions and capital exchanges with FTX, and it is difficult to completely dispel the doubts of the outside world.

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(picture from the community)

CZ suddenly stated that Binance received approximately US$2.1 billion equivalent in BUSD and FTT for exiting a part of FTX’s equity last year. As a result of recent revelations, Binance has decided to liquidate any remaining FTT on its books. Binance will attempt to liquidate in a manner that minimizes market impact, which is expected to take several months to complete due to limited market conditions and liquidity. FTT then plummeted. Caroline interimly responded that Alameda would be happy to buy from you today for $22 if you want the FTT sell to have minimal impact on the market.

SBF, who has been silent on the Alameda incident, also had to speak out. He said that he has great respect for everything you have done to build the industry we see today, whether they pay back or not, and whether we use the same method. Including CZ. Anyway - as always - it's time to build. Make love (and blockchain), not war.

CZ's response was straightforward: Liquidating our FTT is just post-exit risk management, learn from LUNA. We've supported before, but we don't pretend to have sex after divorce. We are not against anyone. But we will not support those who lobby against other industry participants behind their backs (here alludes to SBF’s proposal to strengthen the blacklist management of the encryption industry and DeFi front-end KYC, which caused controversy).

Then SBF responded again: a bunch of unfounded rumors have been circulating. FTX's finances are audited and while it can sometimes slow us down on product, we are highly regulated and we have processed billions of dollars in deposits/withdrawals today. (implying that there were a lot of withdrawals after the rumors emerged, but the deposits and withdrawals were normal) and a lot of dollars<>Stablecoin conversions are underway. In the end you should do what you want and trade where you want. We thank those who stayed; when this is over, we will welcome others back.

On the morning of November 6, The Data Nerd's research showed that Alameda Research received 56 million USDC from Circle, and then transferred it to FTX. They have sent $257 million to FTX in the last 24 hours. Meanwhile, FTX’s stablecoin outflows were the highest of any exchange over the past seven days. The net outflow was $292 million. According to Nansen, in the past 7 days, Binance has received US$337 million inflows, making it the largest entity for stablecoin inflows, and its current balance is US$26.6 billion.

SBF's restraint seems to make it impossible to continue "arguing", and the matter seems to have come to an end for the time being. What is the reason for the fierce confrontation? We think there are three angles: the feud between Binance and FTX; FTX has recently made Binance feel challenged; Binance has always been highly vigilant against competitors.

1. Binance used to be an investor in FTX, and this investment has become one of Binance’s most profitable investments. But it is obvious that Binance Investment does not care about income, and it is essentially a strategic investment. CZ must be very annoyed that the investment object has become the biggest competitor. Earlier, Binance announced that it would withdraw from this investment. Although we don’t know what happened behind it, the relationship between the two parties did start to take a turn for the worse.

2. In the rescue and acquisition of non-performing assets such as Celsius Blockfi Voyager, FTX Binance is struggling. They have a huge number of US users and licenses, which are undoubtedly assets that both sides are competing for. FTX has an overall victory. This seems to have something to do with their good relationship in the US. In contrast, Binance’s former US CEO resigned and broke the news everywhere to attack Binance, criticizing Binance as a Chinese company. CZ also had to post a long response explaining that he is Canadian. Under the ebb and flow, in recent investments in some large projects such as Atpos, FTX is the lead investor, but Binance Labs can only follow the investment, which once again shows the dominant position of FTX in the US currency circle.

3. The DNA of Binance has always been very wary of competitors. Not long after the Internet celebrities in the currency circle sang with Sun Yuchen, Binance dropped 150,000 US dollars, which shows that there is no pretense of being the world's largest firm. In the face of FTX's global ecology, it is indeed a routine operation to suppress it from all possible aspects.

Finally, for ordinary users, they may be more concerned about the future trend of FTX and FTT. That is, is FTX at risk? We provide a few observations of our own, which do not represent investment advice. Due to the serious opacity of the data, this judgment is likely to be wrong.

1. FTX’s funds seem to have no major problems for the time being. (Although CEX is a black box, we can only judge from some actions on the surface, such as quick compensation to the victims of previous counter-attacks; a large number of leading investment, acquisitions, political donations, etc., FTX is still spending a lot of money)

2. There must be complex related transactions between Alameda and FTX, which is also where Binance attacked and SBF dared not respond. Procedure is one thing, result is another. As analyzed by some professionals, 3AC and others are superstitious about the Bitcoin supercircle and betting on the direction that leads to a rout. The ruthless style of SBF and Alameda (known for selling their own investment project tokens) and their preference for short-selling and short-selling methods seem to be incompatible so far. Not like another 3AC.

3. What is the problem with FTX? If multiple negative factors intertwine and occur simultaneously in the future (such as hacker attacks as the fuse), his ability to resist risks will indeed be relatively weak. In addition, the opacity of the relationship between FTX and Alameda will also cause users to worry. The huge contrast between the front and back of Three Arrows Capital has caused everyone’s high distrust of centralized institutions, and also led to a large number of withdrawals this time (Binance’s future attacks will certainly not be absent).

I hope SBF can use this event to show more transparency, such as regularly disclosing FTX and Alameda audit reports or some audit content (such as who is the audit agency? Learn from Tether), give the public more confidence, and even be able to trust Binance Anti-customer-oriented.