Binance denies causing FTX to go bankrupt

Sam Bankman-Fried, the founder of crypto exchange FTX, has accused Binance of playing a role in its bankruptcy. A remark that did not please the person concerned.

There was a lot of suspicion, frustration about FTT in particular, and FTX as a company.e. ” During’a conference in Abu Dhabi on November 17, Changpeng Zhao, the popular founder of the Binance crypto exchangereturned to the impressive collapse of FTXand he did not mince his words.

FTX, which was still the 2nd largest platform in the world last week and was considered one of the safest, filed for bankruptcy on November 11. FTX drags down many companies, which had placed their cash in its coffers, and many customers who have seen their money fly away. But if Changpeng Zhao, nicknamed CZ, had such harsh words towards FTX, it’s because he was accused of being the cause of its bankruptcy.

Changpeng Zhao believes he has no connection with FTX’s bankruptcy // Source: ME/YouTube Contractor

Did Binance push FTX out of business?

This is Sam Bankman-Fried, the founder of the fallen platform, which blames Binance and CZ for the downfall of FTX. In order to better understand the origin of the controversy, it is necessary to return to the circumstances of the bankruptcy and the few days which preceded it.

FTX’s troubles started on November 2, with the release ofan article on Coindesk questioning the funds of the platform. The problems mainly concern the FTT, the native tokens of FTX which allow to pay transaction fees: they would represent a large part of the funds of a sister company. Therefore calling into question the entire financial arrangement and funds of FTX.

A few days after the article was published, CZ tweeted that he was going to sell Binance FTTs following the “ revelations on these. CZ’s message is pushing so many customers to do the same, so much so that FTX is struggling to keep up: withdrawal requests reach the equivalent of $6 billion in 3 days. The platform has a big liquidity problem.

On November 8, two days after his first post, CZ tweeted that Binance intends to buy FTX, as it would “ called for help “. The acquisition would allow FTX to solve its liquidity problem.

On November 9, a few hours after CZ’s announcement, the situation turned around: Binance gave up buying FTX. It motivates the abandonment of the project by ” reports of mismanagement of client funds “, and indicates that a “ investigation by an American agency would be in progress. FTX did not recover from this message, and declared bankruptcy a few days later, on November 11.

CZ Says He Isn’t Responsible for FTX’s Bankruptcy

Sam Bankman-Fried, whose management is completely disavowed by messages from CZ and Binance, launches as early as November 10 on Twitter a message to the one he calls his ” opponent “: ” well done you won “. Many observers of the crypto scene saw this post as a thinly veiled rebuke.

In Abu Dhabi, a week after Sam Bankman-Fried’s initial accusations, CZ denied causing FTX’s problems. “ Only a psychopath can write such a tweet “, he said, according to AFP. ” If I say something negative about Bitcoin, the price probably won’t move much (…) the fact that people reacted was not our fault “Defended Changpeng Zhao.

Sam Bankman-Fried, founder of FTX // Source: Bloomberg Markets and Finance
Sam Bankman-Fried, the founder of FTX // Source: Bloomberg Markets and Finance

In fact, FTX ended up in bankruptcy due to mismanagement by its leaders. John Ray, the new boss of the exchange platform since November 11 and in charge of the bankruptcy procedure, has also strongly criticized his management. ” Never in my career have I seen such a complete failure of corporate controls and such a complete lack of reliable financial information. “, he said in documents for the bankruptcy judge.

In the end, CZ is certainly not solely responsible for FTX’s bankruptcy, but Binance may well have dealt him the deathblow with these actions.

Binance denies causing FTX to go bankrupt