Binance Is Not Buying FTX Anymore. What Is Going On

GM Readers! This is BitDegree Insider, and we're here to state the fact that, in crypto, a new day means new plot twists.

Today's selection:

• CZ's U-Turn
• Big Names Go Proof of Reserves
• CPI Announced
• USDD Depegs
• Puzzle Thursday
• Selected Meme of The Day
• Bite-Sized News

CZ's U-TURN

We're almost certain. CZ has something personal against our newsletter.

We complained that the news about Binance acquiring FTX broke out 20 minutes after we published Tuesday's post.

Yesterday we described how the buyout deal was achieved and how much drama went into it.

Only to publish the newsletter and read the news an hour later about how CZ has changed his mind. 

Well. This is crypto. The only certainty here is uncertainty.

But one this was made clear.

CZ has changed his mind. Binance backs out of the deal to buy FTX.

FTX's problems, apparently, are 'beyond our control and ability to help'.

That's how Binance explained their decision.

"Mishandled customer funds and alleged US agency investigations," were among the finds that Binance discovered during their due diligence process.

This marks the continuation of SBF's downfall.

Previously he was compared to the likes of J.P. Morgan or Warren Buffet.

Now he's more likely to be found in the context of such figures like Do Kwon (Terraform Labs) and Su Zhu (3AC), the horsemen of the 2022 crypto apocalypse.

Fall from grace intensifies.

As for today, SBF has reportedly told investors that he's in need of $8 billion due to an increase of withdrawal requests since the FTX bloodbath began.

But the problems don't end here.

Binance announcing their U-turn on the idea to buy FTX rippled through the market like a tsunami.

Bitcoin fell below $16k. Lowest level in two years. ETH fell to $1,137. That's 25% of what it used to be during its all-time-high era. It was temporary, but it felt like a blast.

It's brutal. And it doesn't look like it's over. We'll keep you posted.

CPI ANNOUNCED

FTX makes it look like everything is going to hell. But there's something good happening as well.

October's Consumer Price Index (CPI) data was released on Thursday.

It showed that inflation rate calmed down and sits at 7.7%.

Analysts predicted it to be 7.9%. And it's 0.5% lower than it was in September, when inflation reached 8.2%.

The Fed will take this as a sign that their tight monetary policy works.

Market greeted the good news.

In the 20 first minutes after CPI was announced, Bitcoin price rose from $16.592 to $17.330.

This may calm down the ongoing FTX mess. At least for a while.

PROOF OF RESERVES

You can't make an omelet without breaking a couple of eggs.

In theory it sounds nice. In practice it's painful. But it works.

The FTX situation opened everyone's eyes. Crypto exchanges have to be more transparent, and way more prepared for hitting an iceberg.

And the biggest names in this market are announcing new steps they're about to take to make sure the FTX situation doesn't happen again.

The five largest crypto exchanges (OKX, Kucoin, Kraken, Bitmex, Binance) have already agreed to publish their reserves in the Merkle Tree format, an open-source code that cannot be faked.

It's something new for all of them except for Gate.io. They've been publishing their reserves in the Merkle Tree format for the third year in a row.

But what does this 'Merkle Tree' thing mean?

Merkle technology is like the fingerprint of all transactions in a block.

This is the primary method for verifying that the data on the network has not changed or been corrupted.

Merkle Tree is also a way to validate old data on the blockchain.

For example, if you use a crypto wallet on a mobile phone, your application does not need to download all blockchain transactions in order to validate them.

Merkle Tree will check all of the previous transactions.

One step towards high security standards becoming the norm. Well… Better late than never.

USDD DEPEGS

The FTX bomb continues causing collateral damage.

In April 2022, TRON network launched their own stablecoin - USDD. A token pegged to the United States Dollar.

USDD's selling point was the 'over-collateralized stablecoin' card. Meaning they had safe, excessive reserves that were to ensure that USDD stays at a fixed value of $1.

Well, guess what. On November 9th, USDD fell to $0.96. Today it mildly recovered, and stays in limbo between $0.97 and $0.98.

But... There's something else.

Tether, the industry's #1 stablecoin… Depegged for some time as well. Now it's back to normal.

Among the reasons for such signs of distress was of course FTX/Alameda mess.

As a reaction to the situation, Tether froze FTX USDT blockchain address that contained $46 million worth of USDT.

In addition, TRON DAO Reserve announced that they may purchase $1B worth of USDT in order to save the market.Optimistic CPI data also helped stabilize the turmoil.

As a response, SBF just posted that Alameda won't just dump everything. According to his latest tweet, they will approach the situation with caution.

Lesson here is simple. If you haven't yet diversified your portfolio… you better begin doing so the second you finish this sentence.

We already quoted a saying about eggs and an omelet. Let's finish a similar one.

Don't put all your eggs in one basket. Because things can go bad if something depeggs.

PUZZLE THURSDAY

It's time to do some math. Here's a crypto math problem for ya. Check it out, think of the right answer, and select it in the poll below the image.

Be sure to tune in tomorrow to see the correct answer!

SELECTED MEME OF THE DAY

BITE-SIZED NEWS

• Ledger Live Experienced Downgraded Server Performance. Sometimes it's the people who underperform, sometimes it's the machines.
• Crypto.com CEO Promises to Publish Company's Proof of Reserves. More transparency. Right about time.
• SEC, DOJ and CFTC Launches Investigations Into Troubled Crypto Exchange FTX. It was only a matter of days.
• FTX.com is Back Online with FTX Ventures and Alameda Research Websites Shut Down. New subtle layers to the ongoing earthquake.