The ongoing events between FTX CEO Sam Bankman-Fried and Binance CEO Changpeng Zhao have affected the entire cryptocurrency market. 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 Kriptokoin.com; There are numerous reasons for the crash. However, there are many reasons why Binance CEO CZ decided to sell the tokens linked to his FTX. A deleted tweet drew attention. A Twitter thread features the legal process between Bianace and FTX dating back to 2019, when the two companies were seen as rivals. Binance was founded in 2017 and has quickly made a name for itself in the crypto industry. Two years later, the creation and launch of FTX, also quickly becoming a leader, was remarkable.
In 2019, Binance made the move to follow a leading competitor and invested in FTX. FTX and Binance became the world’s two largest cryptocurrency exchanges in 2022. Recently, events flared up between the two exchanges. One of the things that sparked events was Bankman-Fried’s stepping up for more regulation in the cryptocurrency industry.
Past events between Binance and FTX came to the fore
Following the events, Binance CEO CZ said he would not support those who lobby 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 statements:
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 relations 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.” Also, the CEO of Binance 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 fears that spread across social media. Also with it, investors with accounts on FTX began liquidating their positions and withdrawing 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 withdrawals were never stopped.
Binance and FTX leaders made a surprising announcement while investors were examining the events and the impact of the sales news.
This afternoon FTX asked for our help. There is a serious liquidity crunch. To protect users, we signed a non-binding LOI to fully acquire FTX.com and help clear the liquidity crunch. Binance CEO Zhao, we will be running a full DD in the coming days.
Binance CEO says transactions will take time
CZ explained that there is a lot to cover in the news and it will take time to complete and communicate. Bankman-Fried said that FTX asked Binance to come and help with their liquidity issues. The CEO stressed that this is absolutely important because customers need to be protected.
The cryptocurrency market has lost $153.3 billion in market capitalization since Sunday night with Bitcoin.
What happened in FTT caused acquisition news and liquidity concerns. It looks like 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 owned by Sam Bankman-Fried.
The research director shared his views on the subject
On September 28, CoinMetrics research director 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-chain.
This was by far FTT’s biggest 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 speculates that it is possible for users at Binance to be aware of this arrangement between FTX and Alameda.
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