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Binance CEO says he didn’t ‘master plan’ FTX collapse
Binance CEO Changpeng Zhao speaking at a press conference during Web Summit 2022.
Ben Mcshane | Sportsfile | Getty Images
Binance CEO Changpeng Zhao said on Wednesday that he “did not master plan” the collapse of rival crypto exchange FTX.
In an email to employees that he made public, Zhao said FTX going down “is not good for anyone in the industry” and that employees should not “view it as a win for us.”
The memo comes a day after Zhao announced that Binance, the world’s largest cryptocurrency firm, had reached a non-binding deal with Sam Bankman-Fried’s FTX to buy the exchange’s non-U.S. businesses for an undisclosed amount, rescuing the company from a liquidity crisis. Earlier this year, FTX was valued at $32 billion by private investors.
Since news broke of the agreement, FTX’s native token FTT has plummeted to $3.50, down from around $25 a week ago. Zhao contributed to the decline, when he announced publicly over the weekend that Binance was selling its FTT holdings.
Zhao said in the memo that Binance employees should not buy or sell FTT.
“DO NOT trade FTT tokens,” Zhao wrote in the letter. “If you have a bag, you have a bag. DO NOT buy or sell.”
Zhao added that user confidence is severely shaken, and that he expected the onslaught of regulatory scrutiny of exchanges to rise because of the turmoil. FTX did not respond to CNBC’s multiple requests for comment.
Investors turned bearish on digital assets this year amid a spate of failures, but FTX is the biggest domino to fall, and its descent came with shocking speed.
Bitcoin dropped more than 7% Wednesday, trading below $17,000, and the overall market cap of tokens is down to $840 billion, the lowest in years.
Zhao said Binance plans to significantly increase its transparency, proof of reserves and insurance funds.