🔥How Exchanges Liquidate Your Positions and Manipulate Currency Rates

🟠In recent news, ex-head of Alameda Research, Caroline Ellison, testified that she colluded with Sam Bankman-Fried to artificially sell off Bitcoin to keep its price under $20,000

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So, what does this latest piece of intel tell us?👇

📛Futures - You're Playing Against the Exchange

On the surface, futures might seem like a game between two exchange participants, with the exchange simply acting as an infrastructure provider.

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But, it's pretty clear that the exchange itself plays the market. It's an open secret: For instance, when you want to list your project on an exchange, working with a market maker and meeting specific trading conditions are mandatory.

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Now, think about all the newbies and those touting futures trading strategies, signals, patterns, and the whole circus. How wise is it to trade highly manipulated futures against an exchange that always has your deposit?

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Plus, the exchange has endless resources at its disposal. Sure, you can take a spot position in a less hyped project after analyzing on-chain data and crunching the numbers.

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But diving headfirst into volatile assets, fueled by exchange hype and inflation, do you really think exchanges are running a charity?

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📛Market Prices are Manipulated; Exchanges are Massive MM Liquidity Pools

In essence, exchanges are hoarding user liquidity and playing games with market makers (MMs).

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Unlike banks, there's hardly any oversight on balances and mandatory reserves here. Until you cash out to the real world, you're trading in virtual assets.

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Just because Binance conducted a token audit doesn't solve the overarching issue. It merely vouches for a balance at a specific moment in time.

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Often, a significant chunk of this balance comprises the exchange's assets and affiliated tokens like BNB, BUSD, etc.

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It's a mere marketing gimmick, a defense mechanism against new and smaller exchanges that don't yet have the resources or their native stablecoin schemes to sustain their operations.

This bombshell dropped during the criminal trial involving FTX, where Ellison revealed that Bankman-Fried instructed Alameda to sell BTC, acquired from FTX client funds, in a bid to stabilize its price. Further digging unveiled Ellison's misuse of FTX customer deposits to cover Alameda's debts