The struggling cryptocurrency exchange FTX is due to be bought by Binance, its larger rival ❓ What's actually going on - and what does it mean for crypto? 🔴 stokel explains
That claim makes it seem like this was simply a smart business decision. However, the second half of Zhao’s statement confirming the sale suggests there are other contributory factors to him and his company pulling the plug on a lifeline for their competitor.
“We gave support before, but we won’t pretend to make love after divorce,” he wrote. “We are not against anyone. But we won’t support people who lobby against other industry players behind their backs.”that FTX chief executive Sam Bankman-Fried had been in conversations with US regulators investigating the cryptocurrency market.
Zhao’s public statement of no confidence in FTX had a huge impact in the crypto world. Zhao was already known as the “king of crypto” because of his and Binance’s supremacy – a reputation that was only underlined by the actions of the last week. “The meme that Changpeng Zhao is the king of crypto is mostly because of that one tweet,” says McCorry. “He was able to allude to or speculate that FTX was insolvent. This led to the downfall of FTX, as it led to a run on the exchange as customers withdrew their funds.” Within 72 hours of Zhao’s tweet, a reported $6bn of withdrawals were made from crypto holdings with FTX.
Lacking the assets to cover liabilities to its customers, FTX and Bankman-Fried were left with no alternative but to come calling back to the man who had arguably triggered the massive run on their company, to ask for help.
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