Binance CEO CZ shared what happened in the middle of the collapse of one of its biggest rivals, FTX, with its founder Sam Bankman-Fried (SBF). He shared that he gave up on his purchase intention when he saw the numbers revealed 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 pit in November. Following the balance sheet disclosure of Alameda Research, which emerged 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, with the stock market, which was in a liquidity crisis due to the demand for multiple withdrawals. However, CZ, at a conference in Indonesia today, said that “the situation is much worse” when he saw the numbers emerging about the stock market.
CZ shared that, along with US regulators who stepped in to investigate the exchange, they stopped buying when news emerged that FTX was using user funds the way it shouldn’t have.
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. Leading exchange published a list of many hot and cold wallet addresses on Thursday.
Koindeks.com As you follow, US regulators have launched a joint investigation with the SEC into FTX at the CFTC. CZ said at the conference that it was valuable 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 have to focus on stock market processes,” he says. He adds that this would cover areas such as an exchange’s business model and evidence of reserves to show where user funds are.
I think we’re going to get a lot more scrutiny on these fronts, but it’s actually appropriate for this segment.
Binance CEO confirms FTX is using unfamiliar funds
Although CZ initially took action to help FTX, he gave up on this attack after the facts emerged. He said that after Alameda Research’s balance sheet disclosure, his group offered to sell him FTT. Binance CEO justified this bill and approved the sale of FTT. He then shared the information of the whale watching bot Whale Alert for transparency. CZ also said, “This problem was not created in 3 days. FTX improperly used user funds.”
CZ reported that they will sell their $580 million FTT after Alameda Research’s balance sheet disclosure. Binance acquired these FTT Tokens after exiting their stake in FTX.