Global crypto exchange FTX collapsed yesterday, an apparent victim of its founder's hubris and its top rival's ruthlessness.

Why it matters: Booms and busts are common in crypto, but never anything close to this magnitude. And the reverberations are deafening.

The headline: Binance, the world's largest crypto exchange, agreed in principle to acquire FTX, the world's third-largest crypto exchange. The deal does not involve either company's U.S. operations, which are structured as separate entities.

• Deal terms weren't disclosed, not even to venture capital funds that invested around $2 billion into FTX and first learned of it via social media. It seems likely that specifics haven't yet been determined; FTX continues to spiral, with many speculating that the merger won't ever close.

What we know: Binance, one of FTX's original investors, announced over the weekend via Twitter that it would sell its holdings in FTT, a token used for trading on FTX, on the open market.

• Alameda Research, a crypto trading firm also founded by FTX CEO Sam Bankman-Fried, said it would defend FTT at $22. But other investors quickly lost confidence — perhaps wondering if Binance knew something they didn't — with FTT soon breaking below $22 and then entering a tailspin.
• An exchange shouldn't have liquidity troubles. It's just an exchange. But FTX appears to have significant financial ties to Alameda, beyond just Bankman-Fried's shareholding, as partially detailed last week in a CoinDesk article.
• Binance founder Changpeng Zhao, known as "CZ," is sure to have read the CoinDesk piece, which made major crypto waves.

What we don't know: CZ's motives or intentions. One possibility is that he just wanted to dent FTX, which had been gaining market momentum.

• Another theory is that CZ recognized that his tweets could cause the crypto equivalent of bank run, allowing him to either buy FTX on the cheap or just let it bleed out. Either way, a major rival vanquished. Or, as one source put it to me yesterday, this was "an assassination by Twitter."
• There are also huge questions about the structure of Bankman-Fried's empire, and what exactly is owned by investors in FTX (which, again, is a different group than those who plugged at least $400 million into FTX US). For example, was money comingled between FTX and Alameda? Is the very active FTX Ventures only Bankman-Fried's personal money, without any FTX ownership, let alone the venture investments also made by Alameda?
• Neither Bankman-Fried nor FTX Ventures chief Amy Wu responded to requests for comment.

The consequences: This is a disaster for some of venture capital's top names, including Sequoia Capital, and may eventually prompt LP litigation threats.

• Venture funds invested around $2 billion into a company, most recently at a $32 billion valuation, without a single board seat in return. In fact, it's unclear if FTX even has a board of directors, audit committee, CFO or chief compliance officer. Instead, it just seems to have some sort of VC advisory committee.
• Either investors knew of the financial interconnectedness between Alameda and FTX and let it slide, perhaps even viewing it as beneficial, or they didn't know because they eschewed oversight. Either way, LPs should be furious.
• FTX backers includes Sequoia (which once sued Binance for unrelated reasons), Paradigm, SoftBank, Tiger Global, BOND, Temasek, BlackRock, Lightspeed, Insight Partners, Ribbit Capital and Race Capital.
• At the very least, the FTX experience will put a major chill on venture investment in crypto, even in unaffected areas like decentralized finance. If FTX can go from $32 billion to (maybe) zero in just 36 hours, who's to say the same can't happen elsewhere? Why would LPs take the chance?
• "This is an indictment on Sam and the VCs," says one senior crypto industry source. "The crypto shit worked just fine."

Politics: Another issue is that Democrats just lost one of their most prolific donors. Bankman-Fried contributed around $37 million to Democrats during the most recent election cycle (plus $235k to Republicans), per OpenSecrets.

• As for Republicans, they also got $19 million from fellow FTX exec Ryan Salame.

The bottom line: This isn't a replay of Enron or Theranos, but it sure has echoes of both.

Republicans failed to catch a red wave in yesterday's midterm elections. As of this morning, the House is likely headed for a tiny GOP majority, albeit still uncalled, and the Senate remains undecided.

Why it's the BFD: There are no mandates for either party, which means that investors shouldn't expect any big legislative swings on much of anything. There may be some increased House oversight on agencies like the SEC and FTC, but even that may be muted.

Of note: Venture capitalist J.D. Vance won his Senate bid in Ohio, while fellow Peter Thiel mentee Blake Masters is trailing in an Arizona senate race that remains too close to call.

• Read more at Axios Columbus and Axios Phoenix.

The bottom line: Meet the new boss, same as the old boss. His name is Jay Powell.

🚑 Zenas Biopharma, a Waltham, Mass.-based developer of therapeutics for autoimmune disaeses, raised $118m in Series B funding. Enavate Sciences led, and was joined by Longitude Capital, Vivo Capital, Rock Springs Capital, Perceptive Advisors, Agent Capital, Pivotal bioVenture Partners, Superstring Capital and insiders Fairmount, Wellington Management, Tellus BioVentures, Quan Venture Fund and Xencor. https://axios.link/3fUqdkr

• Hopper, a travel booking app, raised $96m from insider Capital One. https://axios.link/3UF0ifv

🍺 Athletic Brewing, a Stratford, Conn.-based nonalcoholic beer brewer, raised $50m from Keurig Dr Pepper (Nasdaq: KDP). Other backers include TRB Advisors and Alliance Consumer Growth. www.athleticbrewing.com

• Laika, a New York-based security compliance platform, raised $50m in Series C funding. Fin Capital led, and was joined by Centana Growth Partners and insiders JPMorgan Growth Equity Partners, Canapi Equity Partners and ThirdPrime. https://axios.link/3G0cNOO

🚑 Juvena Therapeutics, a Redwood City, Calif.-based computational platform for mapping the therapeutic potential of secreted proteins, raised $41m in Series A funding. Mubadala Capital and Horizons Ventures co-led, and were joined by Bison Ventures, Manta Ray Ventures, Irongrey, Alumni Ventures, Plum Alley, Transform VC, BoxOne Ventures, Intersect VC, Compound and Felicis. www.juvenatherapeutics.com

• Macrometa, a San Mateo, Calif.-based edge cloud computing startup, raised $38m. Akamai Technologies led, and was joined by Shasta Ventures and 60 Degree Capital. https://axios.link/3DSJPNZ

• Infinitum, a Round Rock, Texas-based developer of air core motors, raised $30m from Riverstone Holdings Latin America, Alliance Resource Partners, Caterpillar Venture Capital and the Cottonwood Technology Fund. www.goinfinitum.com

• Archax, a British digital asset exchange, raised $28.5m in Series A funding. Abrdn led, and was joined by Bitrock Capital, Blockchain Coinvestors and the Tezos Foundation. https://axios.link/3tdvzdO

• Glow, an SF-based digital insurer for small businesses, raised $22.5m in Series A funding. Cota Capital led and was joined by AV8 Ventures, Markd, Startup Venture Capital and Maiden Re. www.glow.co

• Fordefi, a DeFi wallet maker for institutions, raised $18m in seed funding. Lightspeed Venture Partners led and was joined by Alameda Research, Jump Capital and Castle Island. https://axios.link/3hottFc

• Equals, a spreadsheet startup, raised $16m in Series A funding. Andreessen Horowitz led, and was joined by insiders Craft Ventures, Box Group, Worklife and Combine. www.equals.app

🚑 Joylux, a Seattle-based menopausal health services and devices startup, raised $13m in Series A funding from J-Ventures, J-Impact and Kathy Fields. www.joylux.com

• Anzen, a provider of executive risk insurance software, raised $10m led by Andreessen Horowitz. www.anzen.com

• Mendel, a Mexico City-based B2B corporate spend management startup, raised $10m in new Series B funding and $50m in debt from Industry Ventures, Infinity Ventures and Victory Park Capital. https://axios.link/3WNSdXS

🚑 Secure AI Labs, a Cambridge, Mass.-based clinical data registry, raised $4.7m in seed funding. Asset Management Ventures led, and was joined by Mozilla Ventures, Future Labs Capital and York IE. www.secureailabs.com

• Cherry, a Brooklyn-based payments and invoice tracking automation startup, raised $4m in seed funding led by NFX, per Axios Pro. https://axios.link/3TkzfFc

🚑 Local Infusion, an ambulatory infusion center startup initially focused on Maine and New Hampshire, raised $4m co-led by Brand Foundry Ventures and Meridian Street Capital, per Axios Pro. https://axios.link/3DUlHdK

🚑 Options MD, an LA-based provider of care for treatment-resistant depression, raised $2.35m. Bread & Butter Ventures led, and was joined by M13, Bright Ventures, and Collab Capital. MedMountain Ventures and Techstars. www.optionsmd.com

• Alden Global Capital has abandoned its takeover bid for local newspaper publisher Lee Enterprises (Nasdaq: LEE), per Axios. https://axios.link/3WMhW2z

• Allied Industrial Partners acquired Wall Recycling, a Raleigh, N.C.-based solid waste management company. www.wallrecycling.com

• Apollo Global Management, Carlyle and KKR are among firms discussing a possible buyout of Eclipx (ASX: ECX), an Australian fleet leasing business with an A$560m market cap, per The Australian. www.eclipxgroup.com

🚑 CNSI, a Medicaid and Medicare management company owned by Carlyle, agreed to merge with Apax Partners-backed peer Keepro, per Axios Pro. https://axios.link/3tdqtOL

⚡ DIF Capital Partners agreed to buy a majority stake in Alight, a Stockholm-based developer of subsidy-free solar projects in the Nordics. The deal includes a €150m investment and a secondary buyout of existing shareholders. www.alight-energy.com

• Fortress Investment Group, a unit of SoftBank, is in talks to buy Japanese department store chain Sogo & Seibu from Seven & i Holdings (Tokyo: 3382) for more than $1.4b, per Bloomberg. https://axios.link/3UIlYXY

• Genstar Capital invested in Likewize, a Southlake, Texas-based mobile device protection company backed by Brightstar Capital Partners. www.likewize.com

🚑 GHO Capital and Vistria Group agreed to buy Alcami, a Wilmington, N.C.-based biotech contract development and manufacturing org, from Madison Dearborn Partners and Ampersand Capital Partners. https://axios.link/3fMGGY5

• KKR and Global Infrastructure Partners agreed to buy a stake in Vantage Towers, the Frankfurt-listed mobile towers unit of Vodafone (LSE: VOD). https://axios.link/3A2v75T

• Kymera, a portfolio company of Palladium Equity Partners, acquired CASL, a maker of metallic and ceramic alloy coatings. www.kymerainternational.com

• Stax, a Boston-based portfolio company of Blue Point Capital Partners, acquired AMR International, a London-based consultancy focused on commercial due diligence. www.stax.com

🚑 Conduit Pharmaceuticals, a San Diego-based developer of drugs for autoimmune diseases and idiopathic male infertility, agreed to go public at an implied $700m valuation via Murphy Canyon Acquisition Corp. (NASDAQ:MURF), a SPAC formed by Presidio Property Trust that initially was to focus on real estate. https://axios.link/3UHDxrf

• Fast Radius (Nasdaq: FSRD), a Chicago-based on-demand manufacturing platform that went public earlier this year via SPAC, filed for Chapter 11 bankruptcy protection. VC backers that still had significant stakes include Drive Capital and UPS. https://axios.link/3NT4rdm

• KPS Capital Partners agreed to sell Howden, a Scottish provider of air and gas handling solutions, to Chart Industries (NYSE: CTLS) for $4.4b. www.howden.com

🐶 Mars Petcare agreed to buy Canadian petfood maker Champion Petfoods from Bedford Capital and Healthcare of Ontario Pension Plan. https://axios.link/3ti3CBI

• One Rock Capital Partners is considering a sale process for Innophos, a Cranbury, N.J.-based food additives maker that could fetch more than $3b, per Bloomberg. https://axios.link/3ti2yhc

• The Recount, a political video news startup, is seeking a buyer for a nominal sum, after losing $10m last year on $1m in revenue, per Axios. It raised over $30m from VC firms like USV, Foundry Group and True Ventures. https://axios.link/3FY1Blu

• Elon Musk sold at least $3.95b worth of Tesla (Nasdaq: TSLA) shares since completing his $44b Twitter takeover, per new SEC filings. He'd said publicly twice this year that he didn't plan to sell any more Tesla shares. https://axios.link/3htYnfi

• EU antitrust regulators have opened an in-depth investigation into Microsoft’s (Nasdaq: MSFT) proposed $68.7b takeover of game maker Activision Blizzard (Nasdaq: ATVI). https://axios.link/3zYbLi6

• ProSiebenSat.1 of Germany is considering a takeover bid for Sky Deutschland, which Comcast bought in 2018 via its buyout of pay TV provider Sky TV, per Reuters. https://axios.link/3NOT5HB

• Next, a multinational retailer, has acquired the IP and other select assets of Made.com, a British online furniture retailer that went public last year and then later filed for bankruptcy protection. https://axios.link/3fNHfkg

• EQT raised €1.1b for its third venture capital fund. https://axios.link/3NQ7Eue

• LeadBlock Partners, a crypto-focused VC firm, is raising €150m for its debut fund, per The Block. https://axios.link/3hozRMS

• Synton Capital Partners, a VC firm co-founded by Ron DeLyons (CEO of Creekwood Energy) and focused on underrepresented entrepreneurs, is raising up to $500m for its debut fund, per Axios Pro. https://axios.link/3UjB2vj

🌎 Lori Butler joined Clayton, Dubilier & Rice as director of environmental stewardship. She previously was Carrier Corp.’s VP of environment, health and safety. www.cdr-inc.com