Cryptocurrency Update: An attempt to steady as Binance-FTX deal chills the market

Cryptocurrency Update: After a sudden and broad decline on Tuesday due to concerns over the health of the exchange FTX, a rush of withdrawals, and finally a bailout plan from bigger rival Binance, cryptocurrencies were anxious and searching for a floor on Wednesday. After a 10% decline on Tuesday, which was its worst day since mid-August, Bitcoin, the most valuable cryptocurrency by market value, was down 1% at $18,400. The next largest cryptocurrency, ether, has declined by about 18% since early Tuesday.

However, the market's attention was on FTT, the FTX-related coin, whose financials have been causing investor anxiety since last week. FTT fell by 72% on Tuesday and by another 22% on Wednesday, reaching a two-year low of $4.25. The CEO of Binance, Changpeng Zhao, put pressure on FTX in part by announcing on Sunday that Binance would liquidate its holdings of the rival's token owing to unnamed "new developments." Market participants were shocked when Binance announced on Tuesday that it had reached a non-binding agreement to purchase FTX's non-U.S. unit in order to address what it described as a liquidity crunch.

Kami Zeng, head of research at Fore Elite Capital Management, a Hong Kong-based crypto fund manager, termed this another "alarm warning" for the battered cryptocurrency market and said investors should be cautious for a while."… the whole thing still looks like a dark hole. We are not sure how contagious this could be, but I believe institutions need to show their proof of reserves asap. Confidence does not recover before that," Zeng said.

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Crypto Currency: Monopolizing:

Zann Kwan, a board adviser at Raffles Family Office and a member of the board of the Singapore association ACCESS, which includes participants active in cryptocurrencies and blockchain, together known as decentralised finance, issued a warning of wider and longer contagion (defi). "In the defi business, Alameda is a significant market maker. More events will occur, "She was alluding to FTX-affiliated trading company Alameda Research, formed by Bankman-Fried. Analysts compared it to Terraform Labs' demise earlier this year after its stablecoin, TerraUSD, crashed. Terraform Labs' demise sparked a string of bankruptcies, including those of Singapore fund Three Arrows Capital and American fintech companies Voyager Digital and Celsius.

Crypto Currency: Temasek Engaged:

We are aware of the events between FTX and Binance, and we are engaging FTX in our position as shareholders, Temasek Holdings, a subsidiary of the Singaporean government and a shareholder in FTX, said in an email to Reuters. It is unknown whether the deal between FTX and Binance will finalise because neither party disclosed its specifics. The biggest cryptocurrency exchange in the world, Binance, will carry out due diligence in the next days as a preliminary step in purchasing FTX.com.

According to Bankman-Fried, a California native who now resides in the Bahamas, where FTX is headquartered, the U.S. operations of Binance and FTX are not covered by the agreement. The regulators' reaction to a transaction between the two cryptocurrency exchanges remains unclear. U.S. antitrust enforcers could demand that the merger and antitrust experts said.Binance is also under investigation by the U.S. Justice Department for possible violations of money-laundering rules, Reuters reported last week. That is one of a series of investigations this year into Binance's tro…

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