Without Binance’s support, FTX could go the way of Celsius Network and face bankruptcy filings.
The tug-of-war between Changpeng Zhao, CEO of Binance, and Sam Bankman-Fried, CEO of FTX, on the liquidity problem of the CEX, ended yesterday with the signing of a letter of intent between both parties for a possible purchase of FTX.
However, the case took a 180-degree turn yesterday, when the CEO of Binance announced on Twitter that gave up on the purchase.
“Sad day. We tried, but…” CZ said in a brief tweet. The decision was made after reviewing FTX’s financials and finding a Mismanagement of funds and problems with the exchange structureAt the same time, news of a possible investigation by the US Securities and Exchange Commission (SEC) has led Binance to abandon the deal.
On the other hand, that FTX recognized that I was not able to fulfill with the withdrawals of funds from its clients, it could also have had weight in the Binance decision.
In this regard, according to The Wall Street Journal, Sam Bankman-Fried addressed his investors to warn that the exchange needed emergency funds to cover $8.000 billion following withdrawal requests from its clients.
FTX and the origin of Bitcoin
Jeremy Allaire, CEO of Circle, the developer of the USDC stablecoin, compares the situation at FTX to the event that led to the birth of Bitcoin: The fall of Lehman Brothers.
Allaire says he feels deeply disappointed to see how a technology born in response to the 2008 crisis is making the same mistakes.
El CEO of Circle He believes that the big problem is the lack of transparency, with treasuries and balance sheets that are not very visible, and based on speculative tokens. The solution is better regulation, which allows the creation of a new financial sector, more open, inclusive, accessible and transparent.
Jay Jog, co-founder of the Sei Network blockchain believes that the FTX situation will be terrible for the investor confidence, both retail and institutional, in the short term. However, Kevin March, co-founder of crypto investment firm Floating Point Group, has explained that institutional investors They will not withdraw their funds and that many remain interested in the sector, despite the situation.
For its part, Binance has apologized, assuring that retail investors will suffer, but that in the end this fact will strengthen the cryptocurrency sector and that, over time, “those who misuse users’ funds will be weeded out by the free market.”
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