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Crypto isn’t money. The money has already changed hands when people speculated on the tokens. If anything, wiping crypto off the books will be deflationary to real currencies.

Nowhere. Just like Sequoia's $240m investment - it's just marked down to $0.

Can you elaborate? How does crypto going to zero create money that has to go somewhere? How does crypto dropping in value in any way create money that needs to go somewhere?

I think you have things backwards...

Mainstream media is saying it’s pretty much a bankrun. So massive amount of outflows (from everyones wallets on the exchange) is also what tanked the token?

There would still be the same amount of dollars, there would still be the same amount of crypto. Just nobody would want to swap dollars for crypto any more.