The ongoing events in the middle of FTX CEO Sam Bankman-Fried and Binance CEO Changpeng Zhao have taken the entire cryptocurrency market under its influence. Bitcoin and the broader cryptocurrency market started the day in the red.
Is the contention between FTX and Binance over?
As we have reported as Koindeks.com; There are numerous reasons for the crash. However, there are many reasons why Binance CEO CZ decided to sell his FTX contact tokens. A deleted tweet drew attention. In a Twitter thread, Bianace and FTX are in the middle of the legal process dating back to 2019, when the two companies were seen as rivals. Binance was founded in 2017 and quickly made a name for itself in the crypto industry. Two years later, the creation and launch of FTX, at the same time quickly becoming a leader, was notable.
In 2019, Binance took the leap to follow a leading competitor and invested in FTX. FTX and Binance became the world’s two largest cryptocurrency exchanges in 2022. A short time ago, events flared up in the middle of two exchanges. One of the things that sparked things was Bankman-Fried’s move to further regulation of the cryptocurrency industry.
Past events in the middle of Binance and FTX come to the fore
In the aftermath of the events, Binance CEO CZ said he would not support those who lobbied behind him, citing Bankman-Fried. It is possible that Bankman-Fried may have accelerated the unpleasant events with Zhao with a tweet on October 29. The tweet, which was later deleted, includes the following words:
I’m excited to see him represent the industry in DC going forward! Uh, he’s allowed to go to DC, right?
The tweet, which could question Binance and Zhao’s involvement with China, was later deleted by Bankman-Fried. After the sharing, it is thought that Binance CEO may have sold and suppressed FTTs.
Binance has over $2 billion in assets in FTT that it can sell. CZ announced that Binance is selling the stake as part of its “post-exit risk management.” In addition, Binance CEO again brought up what he learned from the LUNA collapse. After the tension in FTX, the overall cryptocurrency market value fell from $1 trillion to the nine-digit range on Tuesday.
CZ said they learned a lesson from what happened in the Terra ecosystem. In the midst of a bear market, investors are more affected by the risks and horrors circulating on social media. Also, with it, investors who had accounts with FTX began to liquidate their status and withdraw money. This led to some sort of bank influx in FTX and liquidity questions for the company. On Tuesday morning, news spread that withdrawals were halted. As a result, FTX CEO Bankman-Fried said that withdrawal processes are never stopped.
While investors were examining the events and the impact of the sales news, Binance and FTX leaders made a surprising announcement.
This afternoon FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI to purchase FTX.com outright and help clear the liquidity crunch. Binance CEO Zhao, we will be running a full DD in the coming days.
Binance CEO stated that the processes will take time
CZ explained that there is a lot to cover in the news and it will take time to complete and connect. Bankman-Fried said that FTX asked Binance to come and help with liquidity issues. The CEO emphasized that this is absolutely valuable because customers need to be protected.
The cryptocurrency market has lost $153.3 billion in market cap since Sunday night with Bitcoin.
What happened in FTT caused a flurry of acquisition news and liquidity. It seems that the FTT/USD pair provided Alameda with a major bailout in the second quarter. But this plan may be the main reason for its collapse. FTX and Alameda are known as sister companies to Sam Bankman-Fried.
The research manager shared his views on the issue.
On September 28, CoinMetrics research manager Lucas Nuzzi shared an analysis that states that more than 173 million FTTs worth over $4 billion have become active on-chain. In his analysis shared on Twitter, Nuzzi said that on the same day, over $8.6 billion FTT was carried on the chain.
This was FTT’s largest open medium daily move.
According to the researcher, the buyer of the $4.19 billion FTT was none other than Alameda Research.
According to Nuzzi, Alameda then sent the entire balance to the address of FTT’s deployer, which was controlled by someone at FTX. Nuzzi also claims that it is possible for users on Binance to be aware of this arrangement between FTX and Alameda.