FTX/Alameda situation gets awkward

Sam Bankman-Fried's crypto empire, comprising an exchange, FTX, and a trading firm, Alameda, has come under scrutiny.

CoinDesk last week reported on the blurred lines between SBF's conjoined industry titans, referencing a leaked balance sheet document suggesting Alameda maintains an enormous position in the FTT token, created and issued by FTX. The document prompted outspoken altcoin critic Cory Klippsten to describe Alameda’s net equity as at least warranting curiosity.

On Saturday, Alameda Research CEO Caroline Ellison tweeted that Alameda had more than $10 billion of assets “not reflected” on the leaked balance sheet. Ellison added that Alameda had undisclosed hedges in place and had already settled up on a bulk of outstanding loans, according to CoinDesk.

Yesterday, Binance CEO Changpeng "CZ" Zhao tweeted that – owing to concerns about FTX/Alameda – Binance would be liquidating all of the FTT tokens remaining on its books; these were acquired last year when Binance exited a position in its rival. Binance’s early FTX equity stake, going back to 2019, wound up being worth $2.1 billion and was paid out partially in FTT.

CoinGecko's 28th-largest digital asset, FTT spent Sunday traveling from nearly $25 to almost below $22.

"If you're looking to minimize the market impact on your FTT sales," Alameda's CEO tweeted at CZ yesterday, "Alameda will happily buy it all from you today at $22!"

FTX actually just went green over one full hour, reaching $22.56 as of 8 a.m. (EST).

This sudden, slight retracement comes as the level of open interest on futures tied to FTT has now more than doubled to $203 million, according to CoinGlass. “Many new shorts seem to have been put on," said Markus Thielen, head of research at Matrixport.

All of this drama, which has been likened by CoinGecko to a crypto civil war, obscures some decent altcoin moves happening of late.

Polygon, for example, saw its native MATIC jump 4% as part of a seven-day run that has reached +30%. And Litecoin is closing in on $70 on a 24-hour gain of 1%. LTC is up 26% on the week.

Solana suffered double-digit losses in the past 24 hours. Some market observers are blaming slumping NFT activity.

Sales of Solana-abetted NFTs to first-time buyers, as well as to repeat buyers, are waning. Transactions hit an all-time high of 650,000 during the second week of September, Nansen said. Since then, however, the activity has plunged, with the network processing roughly 160,000 NFT transactions as of today (Decrypt).

As of 8:11 a.m. (EST), SOL was $31.37, having shed 12.2% since this time yesterday, per CoinGecko. SOL is down 4.7% on the week.

Mass layoffs at Twitter continue to draw attention and roil markets. Now a considerable number of Meta staffers could be sent packing.

The parent company of Facebook and Instagram is looking to reduce headcount as it struggles with worsening financials amidst an ad revenue slowdown and a multi-billion-dollar metaverse investment that has yet to bear any fruit.

According to a Wall Street Journal report, the upcoming layoff at Meta is expected to affect thousands of employees. An official announcement may come as early as Wednesday.

In an effort to reduce expenses, Meta has in recent months put on a hiring freeze, restructured personnel and pulled the plug on some projects.

Some $15 billion has been thrown at augmented and virtual reality and a variety of related projects designed to put Meta at the center of the burgeoning metaverse. Meta has begun to pick some blockchain dance partners to help with efforts such as establishing its NFT-minting footprint. Polygon, for example, is among those dance partners.

But Meta still has nothing to show for its massive metaverse investment and this current quarter is not looking any different. "As 2023 dawns, Meta will end up losing more money as it continues to try its luck," Bitcoinist said.

Meta CEO Mark Zuckerberg has said he thinks it will take about a decade for Meta's metaverse investments to pay off.