In super short, FTX wants to bailout BlockFI with 250M Credit. This would be "zero" the equity holders.
What happens in this case with Customer funds? I don't know.
My opinion is customer Funds must be protected at all costs. But who knows what happens and what the plan is.
be really careful to those crypto lenders. They pay you 8% APY and give your money away to people like 3AC that burn 18 BIllion in this market.
https://twitter.com/CoinDesk/status/1540806206456864769
- CoinDesk
SCOOP:
@APompliano
and
@MarkYusko
’s Morgan Creek Digital are trying to put together an alternative rescue package for
@BlockFi
.
Why?
@FTX_Official
’s $250M credit line stood to wipe out BlockFi shareholders, including Morgan Creek.
But is this not what happens? Bussines failed and if someone buys it / bails it out equities go to zero?
Normal way?
FTX bailout Voyager too.
One last question
How much leverage is in this market? 110k Bitcoins are on margin longs on Bitfinex alone.
How much are the stable coins leveraged? FTX can not bailout unlimited.
What i mean with leverage?
this:
1000 Tether ---->into 8% APY ----> into ETH ---->into lending into more tether and repeat.
Or 1 Bitcoin ----> loan with it ----> Tether ----> ETH ----> loan ----> Tether -----> Stablecoin farm.
Funds can be easily leveraged massive if this is spread to all protocols.
Liquidations end up in cascades.
Ponzi market.