This is not a crypto newsletter, but the failure of FTX is too interesting not to cover. Binance has now withdrawn the deal offered to FTX citing concerns over the use of customer funds. Customer funds which remain frozen. Can you imagine being an FTX customer and not being able to pay for your morning coffee because your account is frozen? You probably can’t, but only because the hard part to imagine is someone using crypto to buy something that isn't illegal.

The lowdown

• ❌ Wall Street tumbles as investors wait for October inflation figures.

• 🙅‍♀️ Binance ditches deal to save FTX after due diligence and news reports regarding regulator scrutiny.

• 🧐 Meta cuts 11,000 jobs returning it to the same number of employees it had in December 2021.

Flex your finance muscle 💸💪

Returning to the VC term sheet, today we are looking at:

Right of First Refusal (ROFR) 💰

ROFR typically restricts the selling of shares by investors so that the company and its investors can control in whose hands the stock ends up. If an existing investor would like to sell shares, ROFR requires that the investor approach the company and other existing investors to buy the shares on the same terms offered to any third party.

If the company and existing investors (or whoever holds ROFR) decline the offer, then the shares can be sold to the third party.

Read more about the ROFR here.

Featured stories

Binance withdraws life raft offered to FTX

Binance will not purchase FTX after due diligence revealed the potential mishandling of customer funds and likelihood of increased regulatory scrutiny. Binance CEO Changpeng Zhao expressed his devastation at the deal to purchase the rival exchange falling over in this tweet:

While Changpeng Zhao (CZ) has long been a rival of FTX CEO Sam Bankman-Fried, it is also possible that his disappointment in the state of FTX is somewhat genuine. In a letter to employees, also published on Twitter prior to the deal falling apart, CZ highlighted the regulatory issues that the problems at FTX are likely to bring to the whole sector. The SEC is indeed investigating FTX and any regulation is likely to impact CZ’s business and his considerable wealth.

The Project Brazen Rich List estimates CZ’s wealth at $230 billion. To put that into perspective, the person commonly accepted to be the world’s richest man is Elon Musk, whose wealth is estimated at $197 billion. Not bad for building an exchange for what may yet turn out to be a worthless asset class. Certainly beats building all those cars, rockets and tunnels.

The content we're consuming today

• WSJ: Tyson Foods CFO Arrest Adds to Governance Challenges for Board. ($)

Off-balance sheet items

• Acquired: The Complete History & Strategy of FTX – December 2021 interview with Sam Bankman-Fried that is only more interesting to listen to now that he has sustained a full-body gravel rash in the FTX car crash – a 94% hit to his wealth in a single day.

The bottom line