Binance was Behind FTX Implosion: Kevin O’Leary

On December 14, investor Kevin O’Leary asserted during a United States Senate committee hearing on the collapse of the cryptocurrency exchange that Binance was the cause of the collapse of FTX.

O’Lear, a hired FTX spokesperson, testified that when he inquired about SBF’s usage of customer cash over the previous 24 months, he was informed that over $3 billion had been spent to repurchase shares of FTX that Binance held.

Senator Patrick Toomey questioned O’Leary as to why FTX failed, and O’Leary responded, 

“I have an opinion. I don’t have the records.” 

According to O’Leary, the secret conflict between the leaders of the two cryptocurrency exchanges centers on the issue of regulation. Binance and CZ were required to adhere to the requirements and compliance norms of regulators in various jurisdictions because they owned almost 20% of FTX.

O’Leary claims that Zhao’s early November move to sell Binance’s FTX token (FTT) holdings, for which he gave the reasons “recent revelations that have come to light” and “post-exit risk management,” was made to drive down the price of FTX by hurting the company’s balance sheet from the share purchases. 

As O’Leary put it: 

“In my view, my personal opinion, these two […] in an unregulated market […] with this incredible business in terms of growth were at war with each other, and one put the other out of business, intentionally.” 

Furthermore, O’Leary stated that “maybe there is nothing wrong with that, maybe there is nothing wrong with love and war, but Binance is a massive unregulated global monopoly now, and they put FTX out of business.”

Binance’s CZ and FTX’s SBF Engaged in an Argument

Binance CEO Changpeng Zhao (CZ) and former FTX head Sam Bankman-Fried (SBF) engaged in a Twitter argument last week on Friday, both defending the legality of their own business operations behind closed doors. Recent comments made by Kevin O’Leary in an interview with CNBC were also brought up in this argument.