A sequence worthy of the best movies.

Last week, Binance boss Changpeng Zhao (nicknamed "CZ") announced in a tweet that his group - 120 million users - was not going to get its hands on FTX after all, which is none other than one of its main rivals.

What happened? How did FTX go bankrupt in a matter of days? A look back at one of the most incredible sequences in the short history of cryptos.

What happened?

Everything started last Sunday. In a tweet, "CZ" explained that his group would sell all its "FTT", the token issued by its American rival FTX.

FTT tokens offer their holders advantages on the FTX exchange platform.

"CZ" said it wanted to sell just over $500 million of FTT, which it has held since the sale of its shares in FTX. He especially specified that this sale was linked to "recent information" - those of Coindesk - according to which the financial balance sheet of the investment company Alameda Research would be largely composed of... FTT tokens.

What is the problem?

The fact that Alameda Research owns FTX is not a problem in itself. The (big) problem is that Alameda Research is owned by Sam Bankman-Fried (nicknamed "SBF"), who is also the boss of... FTX. In other words, the two companies owned by the same man support each other. Not very reassuring! 😅 

According to Coindesk, Alameda reportedly has $3.66 billion in FTT and $2.16 billion listed as "collateral" in FTT. The remaining few billion would be tokens from Sam Bankman-Fried-backed projects, including Solana, Serum, Maps, Oxy and Fida.

Alameda CEO Caroline Ellison clarified on Sunday that the numbers disclosed by Coindesk represented only a "fraction" of the company's holdings, and that the company had an additional $10 billion in assets.

However, this was not enough to allay the fears of some in the markets. Soon, the FTT token was sold in large quantities, falling well below the $20 mark, a level it has not touched for almost two years...

Most importantly, investors have begun to withdraw their funds from FTX.

How did Sam Bankman-Fried react? 

The FTX boss insisted until Tuesday that his platform was doing "fine." "A competitor is trying to come after us with false rumors," he tweeted, adding, "FTX is fine. Assets are fine. FTX can cover all of its customers' assets."

Sam Bankman-Fried, who did not mention the Alameda situation, concluded with a dig at Binance: "I would love it, Changpeng Zhao, if we could work together for the ecosystem."

What triggered the buyout?

SBF's words did not help. Within two days, tens of thousands of FTX customers had withdrawn their funds from the platform.

According to a message posted by the young boss on the company's Telegram account, the company recorded around $6 billion in net withdrawals within 72 hours! Soon, FTX was overwhelmed and had no choice but to stop withdrawals. On Tuesday, customers could no longer retrieve their funds by mid-day.

Late in the day, CZ and SBF simultaneously announced an agreement to allow FTX to resume operations and manage liquidity issues 💸.

But yesterday, CZ announced that it would not buy the company, which would condemn FTX... and potentially all its users. In a letter sent to investors, among which we find some giants like Sequoia or SoftBank, SBF explained that it was "sorry" and tried to do everything to limit the losses.

This turnaround is quite incredible. At the beginning of October, in an interview with The Big Whale (available here in Premium access), SBF had explained that FTX was in great shape and was even planning to make "important acquisitions", especially in Europe.

What could have caused this "battle"? 

Interviewed earlier this week, "CZ" explained that it had taken the decision to sell all its FTT tokens only to best manage market "risks", a few months after the collapse of the Terra Luna project. In the spring, the collapse of Luna had caused major turmoil and brought down several industry players such as Celsius.

But the explanation is surely elsewhere. In recent weeks, tensions between the American and the Chinese-Canadian have continued to rise over the issue of regulation.

Had SBF become too embarrassing for CZ? It's hard to say. In any case, it marks a turning point in the sector.