Binance CEO CZ talked about what happened with its founder Sam Bankman-Fried (SBF) in the collapse of one of its biggest rivals, FTX. He shared that he gave up on his intention to buy, when he saw the figures and FTX’s improper use of funds.
Binance CEO says the situation is worse than they expected
FTX and its philanthropic founder, Sam Bankman-Fried (SBF), lent a helping hand to several bankrupt crypto companies when the cryptocurrency market crashed by $2 trillion in May. However, he himself fell into the same pit in November. Following Alameda Research’s balance sheet disclosure on November 2, Binance CEO announced that the exchange will sell all FTX Tokens in its possession. Panicked investors rushed to FTX to recover their funds. Help came from Binance and its CEO, CZ, to the stock market, which went into a liquidity crisis due to excessive withdrawal demand. However, at a conference in Indonesia today, CZ said the situation was “much worse” when he saw the emerging figures on the stock market.
CZ shared that when news emerged that FTX was using user funds the way it shouldn’t, they stopped buying, along with US regulators who stepped in to investigate the exchange.
What’s happening around FTX has shaken investor confidence
What happened around FTX was shocking for the market and investors, as well as Solana and FTT. CZ says that greater transparency of exchanges will increase investor confidence. Binance publicly shared its reserves shortly after the FTX crisis. The leading exchange published a list of most hot and cold wallet addresses on Thursday.
As you follow on Kriptokoin.com, US regulators have launched a joint investigation with the SEC about FTX at the CFTC. CZ said at the conference that it is important for regulators to expand their scrutiny. But he added that right now he tends to focus only on KYC and money laundering prevention. Zhao, for regulators; “You should focus on stock market trading,” he says. He adds that this will cover areas such as an exchange’s business model and proof of reserve to show where user funds are.
I think we’re going to get a lot more scrutiny on these fronts, but it’s actually good for the industry.
Binance CEO confirms FTX is using fraudulent funds
Although CZ initially took action to help FTX, he gave up on this move after the facts emerged. He said that after Alameda Research’s balance sheet disclosure, his team offered to sell him FTT. Binance CEO justified this concern and approved the sale of FTT. It then shared data from the whale watching bot Whale Alert for transparency. CZ also said, “This issue was not created in 3 days. FTX improperly used user funds.”
Yes, this is part of it. https://t.co/TnMSqRTutr
— CZ 🔶 BNB (@cz_binance) November 6, 2022
CZ reported that they will sell their $580 million FTT after Alameda Research’s balance sheet disclosure. Binance acquired these FTT Tokens after exiting its shares in FTX.
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