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 edition 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 November 2nd 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,” says Spencer.

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.”

Episode 109 of Season 4 of The Scoop was recorded live with The Block's Frank Chaparro and Framework Ventures Co-Founder Vance Spencer.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests can be sent to [email protected].

This episode is brought to you by our sponsors Tron, Ledn

About Tron

TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |

About Ledn

Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io