Episode 109 of Season 4 of The Scoop was recorded live with The Block's Frank Chaparro and Framework Ventures Co-founder Vance Spencer.
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In response to the unexpected collapse of FTX, billions of dollars in crypto have been flowing out of exchanges over the past 24 hours as market participants rush to self-custody their funds.
In this breaking news episode of The Scoop, Frank Chaparro and Framework Ventures Co-founder Vance Spencer analyze the factors that contributed to FTX’s rapid downfall, as well as speculate on the comingled relationship between Alameda and FTX.
According to Spencer, a Coindesk report on Alameda’s balance sheet published on Nov. 2 was a critical turning point in the saga.
“What I was expecting a giga-brain firm like Alameda to have on their balance sheet was sovereign bonds offset by equity positions offset by other hedges, but it was just kind of like a retail crypto portfolio,” Spencer says.
The prices of tokens associated with FTX and Alameda have plummeted, particularly FTX’s native FTT token, which is down over 80% in the last two days.
Since FTX is backed by some of the biggest funds in the world including SoftBank and Tiger Global, Spencer suggests the fact that Binance appears to be FTX’s only option points to the likelihood that the reality of FTX’s book must be very severe:
“For you to go to your biggest rival who is actively trying to kill you and sell to them implies to me that the other people weren't biting and that [Binance] was kind of the only option… What this makes me think is that the hole is either very large, or there's something else on the balance sheet which caused other people to pass.”
During this episode, Chaparro and Spencer also discuss:
- Why DeFi remains resilient
- How the FTX saga compares to the 3AC meltdown
- The regulatory path forward without SBF
This episode is brought to you by our sponsors Tron, Ledn
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Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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