Just one day after agreeing to save FTX by acquiring it on Tuesday, the largest cryptocurrency exchange in the world, Binance, has driven away from its commitment.
Binance finds mismanagement of user deposits on FTX
The announcement released on Wednesday stated that even Binance was unable to help FTX with its financial situation gone so far. According to Binance, the decision was based on an evaluation of how FTX handled its user’s deposits and potential investigations against the firm by US agencies.
In accordance with Binance, users lose nearly “every time a major player in the industry fails”. The exchange also claimed that unethical players who mishandle consumer assets would be eliminated in the long run by the “free market.” The company further added:
“As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger”.
On Tuesday, FTX froze customer withdrawals after receiving an outpouring of requests to withdraw funds from the platform beginning on Monday, which was again followed by the CZ’s announcement of liquidating all the FTT the company had.
After the fact, Binance CEO Changpeng Zhao (CZ) revealed that Binance had signed a non-binding deal to acquire FTX and aid it in getting over its current liquidity shortage. Though, he did make it clear that Binance retained the option to cancel the contract at any point.
Turning down the conflicting reports that he had promoted the disaster for FTX, CZ said that the collapse of FTX was “not good for anyone in the industry,”
Meanwhile, many leading names are expressing their thoughts on the blazing event. On Tuesday, Coinbase CEO Brian Armstrong made similar remarks, expressing hope that more transparent U.S. legislation would prevent customers from moving their business to less secure overseas exchanges. Binance CEO CZ gave his ‘two lessons’ to learn from the incidents. The other name in the list is circle CEO Allaire, who thinks that the current situation of FTX is similar to “Lehman Brothers”.