Decentral Block Post

Solana (SOL) is on the track to log its worst daily performance on record.

On Nov. 9, SOL's price dropped more than 40% to around $16 primarily due to its association with Sam Bankman-Fried, the founder of crypto-focused hedge fund Alameda Research and cryptocurrency exchange FTX.

Sam tokens get 'fried'

Fried was an early investor in the Solana blockchain project via Alameda Research. On Nov. 8, the entrepreneur's estimated wealth plunged from a whopping $15.6 billion to around $1 billion, according to Bloomberg Billionaires Index.

At the core of this wipeout was a near-collapse of FTX. On Nov. 6, Binance, FTX's rival exchange and early investor decided to sell its $2 billion stake, which it was holding in the form of FTX's native token, (FTT). In response, FTT's price crashed by over 85% and was trading for around $3.60 as of Nov. 9.

Alameda Research's balance sheet reportedly was worth around $12 billion as of June 30, out of which half was FTT. The firm allegedly had $8 billion in liabilities on the same day, raising speculation about its potential insolvency after FTT's massive crash.

Solana (SOL) is on the track to log its worst daily performance on record.

On Nov. 9, SOL’s price dropped more than 40% to around $16 primarily due to its association with Sam Bankman-Fried, the founder of crypto-focused hedge fund Alameda Research and cryptocurrency exchange FTX.

Sam tokens get ‘fried’

Fried was an early investor in the Solana blockchain project via Alameda Research. On Nov. 8, the entrepreneur’s estimated wealth plunged from a whopping $15.6 billion to around $1 billion, according to Bloomberg Billionaires Index.

At the core of this wipeout was a near-collapse of FTX. On Nov. 6, Binance, FTX’s rival exchange and early investor, decided to sell its $2 billion stake, which it was holding in the form of FTX’s native token, FTX Token (FTT). In response, FTT’s price crashed by over 85% and was trading for around $3.60 as of Nov. 9.

Alameda Research’s balance sheet reportedly was worth around $12 billion as of June 30, out of which half was FTT. The firm allegedly had $8 billion in liabilities on the same day, raising speculation about its potential insolvency after FTT’s massive crash.

The rumors about the possible liquidity crisis for the world’s third-largest crypto exchange turned out to be true. Just a day after assuring funds are fine, and they have the assets to back customer’s funds, FTX CEO Sam Bankman-Fried (SBF) announced on Tuesday that Binance has shown intent to acquire the global crypto platform to help with the liquidity crisis.

The liquidity crunch came as a surprise to many, given FTX bailed out numerous firms during the crypto contagion caused by the downfall of LUNA and the insolvency of 3AC.

Even as the crypto community process the events of the past 24 hours, the focus has now shifted toward other SBF-owned entities, especially Alameda Research, a leading principal trading firm. Alameda and FTX merged their venture capital operations in August 2022. Speculation mills are rife that Alameda reportedly faced a crisis itself during the crypto contagion in the second quarter and FTX bailed it out, which eventually came to bite it back.

Lucas Nuzzi, the head of the crypto analytic firm Coinmetric, took to Twitter to point out the FTT market cap increased 124.3% on September 28 when 173 million FTX Token (FTT) worth over $4 billion became active on-chain. Nuzzi pointed out that on the same day, a total of $8.6 billion worth of FTT tokens were moved on-chain.

Related: SBF tumbles off Bloomberg’s billionaire index after trouble at FTX

As the liquidity crisis and acquisition of cryptocurrency exchange FTX continues, Binance CEO Changpeng “CZ” Zhao assured his community of insurance of sufficient funds backing the network. 

In a tweet on Nov. 9, CZ said that the exchange has once again topped its Secure Asset Fund for Users (SAFU) at $1 billion equivalent in light of “recent price fluctuations.”

The tweet included links to two reserve accounts, one of which holds both the Binance stablecoin (BUSD) and the native token of the network Binance Coin (BNB) with an equivalent worth of $700 million. 

The other wallet revealed Bitcoin (BTC) holdings worth around $300 million.

Binance’s SAFU began in 2018 by allocating 10% of the trading fee into a fund that is solely dedicated to backing up user holdings in the case of an incident. In February of this year, the fund hit $1 billion for the first time.

Bitcoin (BTC) liquidated $200 million of long positions on Nov. 8 as BTC price briefly tumbled to two-year lows.

BTC price sets new two-year low

Data from Cointelegraph Markets Pro and TradingView revealed carnage across crypto price charts as exchange FTX kept the mood low.

After initially rebounding over $20,000 on news that the embattled FTX might be bought out by competitor Binance, panic returned after the Wall Street open.

BTC/USD lost $2,000 in under two hours, seeing a sudden plunge that set a low of $17,120 on Bitstamp.

The last time the pair traded at that level was in late November 2020, meaning Bitcoin managed to beat the previous macro lows of $17,600 set in June this year.