The Binance CEO shares his side of the story about his stance towards the rival exchange following the FTX crash. The collapse of FTX occurred last week when CZ announced that Binance will sell its FTT tokens due to Alameda’s reserve disclosures.
Binance CEO shares facts about FTX collapse
The world’s second-largest cryptocurrency exchange by volume has left the market with a gap of $8.8 billion on its balance sheet. Currently, more than 1 million users’ funds are stuck in the exchange’s hot wallets. Although the stock market made optimistic statements at first, it announced that it went bankrupt last Friday. CEO Sam Bankman-Fried has also officially resigned. John Ray III, a restructuring attorney working to save the sinking energy conglomerate Enron, currently fills the CEO position of FTX. SBF will continue to be part of the team.
Binance CEO’s particular highlight is the point; FTX’s bankruptcy is that it is not itself or its stock market. In a recent tweet, CZ is attempting to dispel an ongoing rumor that the crypto exchange is “shorting” or “dumping” FTT, which led to its collapse.
https://twitter.com/cz_binance/status/1592007106806390784
CZ clarified in new tweets that they have never taken a short position against the FTX Token (FTT). Although Binance initially decided to buy the stock market in liquidity crisis, it gave up due to regulatory pressures. Regarding the FTX crisis, CZ says, “We didn’t plan for this or anything related to that.” Its founder gives a few details about his meeting with SBF:
I was surprised when he wanted to talk. My first reaction was that he wanted an OTC (over the counter) deal, But here we are. Before SBF called me, I knew very little about the internal state of FTX.
“FTX is sneaking money through the backdoor”
New allegations about the stock market and its managers came from Mario Nawfal, the founder of IBC Group. In his comments on Twitter, he claimed that founder Sam Bankman-Fried made a large backdoor withdrawal. Nawfal states that he got this information from old FTX stolen. Allegedly, SBF used a backdoor created at the behest of the exchange’s CTO, Gary Wang. Nawfal’s allegations coincide with the hack that stolen more than $400 million in funds by FTX on Friday. He also says that FTX’s sister company, Alameda, was also involved in the “hidden money smuggling”:
The SBF has instructed Gary Wang (CTO) to create the backdoor that allows FTX to secretly move funds to Alameda and other organizations illegally.
https://twitter.com/MarioNawfal/status/1591983468174610433
The FTX employee in question was Yung Dot, the exchange’s former senior engineer. He responded to the allegations with a long flood on Twitter. The former employee confirms that he disclosed this information. He also said that Sam Bankman-Fried may have prepared for this backdoor about nine months ago:
The whole hack was made possible thanks to the elx trapdoor SBF installed ~9 months ago.
I was going to keep this private, but when presented with the opportunity to share it anonymously with @MarioNawfal I happily obliged. Unfortunately, Mario declined Payslips/ID cards, Digital ID, Emails, wallet txns as verification and simply wanted a LinkedIn connect instead?
— Yung Dot (@vydamo_) November 14, 2022
According to the former FTX engineer, the total of cryptocurrencies moved through this backdoor is around $783 million.
All eyes now on Crypto.com
As you follow on Kriptokoin.com, Binance CEO urged all exchanges to share proof of reserve after FTX’s bankruptcy. Crypto.com, on the other hand, came to the fore with a “scam” that emerged in the evidence of reserve. Crypto.com CEO Kris Marszalek admitted to a mistake made about three weeks ago that a staggering amount of Ethereum worth nearly $400 million was “accidentally” sent to the wrong address. According to Marszalet, Crypto.com wanted to move Ethereum to one of its cold wallets. But instead, he transferred 320,000 ETH to the corporate wallet of the Gate.io exchange, as covered by The Verge.
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