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The FTX-Alameda Implosion Has Shaken User Confidence In The Industry: Binance’s CEO Changpeng Zhao

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The FTX-Alameda Implosion Has Shaken User Confidence In The Industry: Binance’s CEO Changpeng Zhao
  • Changpeng Zhao, CEO of Binance, shared how user confidence in the sector has declined as a result of the near collapse of FTX.
  • CZ later added that Binance’s acquisition of FTX should not be viewed as a victory.

Binance’s CEO, Changpeng Zhao, took to Twitter to share a note addressing the recent developments in the crypto industry.

CZ later shared that the acquisition of FTX should not be dubbed a victory for Binance. He later added how the recent FTX-Alameda developments have shaken up user confidence and faith in the industry.

The Purchase of FTX Is Not a Win for Us: Binance’s CZ

Binance’s CZ has shared how the recent FTX Alameda implosion has shaken up user faith in the industry. In a heartfelt note shared via Twitter, CZ outlined that Binance’s acquisition of FTX should not be referred to as a “win” for the exchange considering the near collapse of FTX has intensified regulator scrutiny in the crypto sector

CZ further stated how the unprecedented FTX implosion will have a lasting impact on user sentiment in the industry. He later stressed that the recent developments will result in heightened regulatory scrutiny of exchanges, leading governments around the world to tighten their licencing rules and make it harder for the sector to expand their base abroad.

“FTX going down is not good for anyone in the industry. Do not view it as a win for us. User confidence is severely shaken. Regulators will scrutinise the exchanges even more. “Licenses around the globe will be harder to get.”

CZ also noted that people will now consider Binance to be one of the leading crypto entities, which will ultimately lead users to criticise the exchange’s tactics and methodologies. However, despite such grave concerns, CZ shared how Binance is used to being okay and “leaning into the headwinds.”

“And people now will think we are the biggest and will attack us even more.” But that’s okay. We are used to being open and leaning into the headwinds. In fact, we embrace scrutiny. “We must significantly increase our transparency, proof of reserves, insurance funds, etc.”

The recent Alameda-FTX debacle has led several crypto firms to come clean concerning their adopted crypto practises and policies. Earlier, Coinbase CEO Brian Armstrong had also shared a statement via Twitter, emphasising the need for transparency in the crypto sector.

Zhao further shared how users must not trade their FTT tokens for now and has assured his followers that “things will eventually play out.”

Zhao’s statement also mentions how Binance’s chief was not prepared for the unprecedented FTX implosion. He later shared how Sam Bankman Fried had called him 24 hours before the deal was announced.

“We did not master this or anything related to it.” It was less than 24 hours ago that SBF called me, and before that, I had very little knowledge of the internal state of things. CZ shared. 

The Binance-FTX deal has sent shockwaves throughout the crypto industry, surprising every player involved in the sector. The acquisition of FTX by Binance was primarily carried out to protect FTT from crashing like the LUNA crypto token and was finalised to protect user funds and assets.

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Binance Makes Multi-Billion Dollar Transfers Following FTX’s Collapse

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Binance Makes Multi-Billion Dollar Transfers Following FTX’s Collapse
  • Binance has made transfers worth several billion dollars since the downfall of FTX.
  • Many of these transactions are associated with proof of reserves demonstrations undertaken by centralized exchanges.
  • A recent transaction of $2 billion caught the attention of on-chain whale watchers.
  • Changpeng Zhao has stated that the transaction was to prove ownership of the wallet. 
  • The exchange has clarified that more of these large transactions will take place to verify the ownership to auditors. 

The downfall of FTX has paved the way for the world’s largest crypto exchange to cement its position as the most popular exchange. Binance has been actively involved in the aftermath of FTX’s collapse, from indirectly triggering the bank run on the Bahamas-based exchange, to leading the way in establishing greater transparency in the industry by publishing proof of reserves. 

$2 billion transferred by Binance

Blockchain intelligence firm Arkham Intelligence published a Twitter thread that took a closer look at the billions of dollars that Binance has moved around over the past few days. The report was prompted after on-chain whale watchers alerted crypto Twitter about a massive transfer by the exchange that involved 127,351 BTC worth a little over $2 billion. 

The transfer was seen as a bad sign by many on Twitter given the current crypto climate. Binance had recently published its proof of reserve (PoR) and users on Twitter speculated that the transfer was actually the exchange reversing funds upon completion of the PoR. CEO Changpeng soon clarified that the massive transaction was in fact part of the PoR, but not how it was being perceived. 

“The auditor require us to send a specific amount to ourselves to show we control the wallet. And the rest goes to a Change Address, which is a new address. In this case, the Input tx is big, and so is the Change.” CZ tweeted. 

Binance previously published its PoR, but some still remain skeptical because the exchange has not provided any details about its liabilities, in addition to there being no evident segregation between its own assets and customers’ funds. 

Arkham Intelligence also shed light on some of Binance’s other recent transfers. For instance, the $1 billion BUSD transfer by the exchange which was supposedly for the Industry Recovery Fund launched by CZ. Binance also received close to $1 billion from Tether as part of its chain swap from Solana to Ethereum. 

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BlockFi declares bankruptcy, files Chapter 11

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BlockFi declares bankruptcy, files Chapter 11

Summary:

  • Crypto lender BlockFi declared bankruptcy on Monday after exposure to FTX.
  • The company had some 100,000 creditors and around $256 million in cash when chapter 11 was filed.
  • FTX backed the lender with a $250 million loan following Three Arrows Capital exposure.

Cryptocurrency lender BlockFi filed for chapter 11 bankruptcy on Monday following exposure to troubled crypto exchange FTX, the exchange founded by Sam Bankman-Fried. 

BlockFi held $256.9 million in cash when it filed for bankruptcy. The company also has around $1 billion in assets and liabilities alike. Per details of the filing, the lender boasts over 100,000 creditors including FTX US and the Securities and Exchange (SEC). 

The crypto lender reported $275 million in unsecured claims tied to FTX US. Notably, Sam Bankman-Fried’s exchange loaned $250 million to BlockFi back in June. At the time, BlockFi faced liquidity concerns after exposure to insolvent crypto hedge fund Three Arrows Capital (3AC).

Also, the lender owes $30 million to the SEC as part of a settlement agreement from February 2022. The largest creditor was Ankura Trust Company LLC with a $729 million claim.

BlockFi joined the chat

Celsius, FTX, Voyager, and now BlockFi all filed for bankruptcy in 2022 as the bear market unsettled crypto CeFi players. Hackers exploited loopholes in DeFi smart contract code, stealing billions from protocols, cross-chain bridges, and other decentralized finance solutions. Reports said October was the worst month for crypto hacks so far.

Nevertheless, the decentralized technology that backs digital assets jumped forward in leaps and bounds. Ethereum, the second largest blockchain behind Bitcoin, successfully deployed a major technological upgrade.

Blackrock and Google tapped crypto for services and offerings as well, signaling institutional interest.

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Amazon Taps The Russo Brothers For TV Series About The FTX Saga

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Amazon Taps The Russo Brothers For TV Series About The FTX Saga
  • Amazon is set to release an eight-part series based on the collapse of FTX.
  • The streaming giant has teamed up with the Russo brothers and David Weil for the production of this series.
  • The Russo brothers have described the FTX scandal as one of the most brazen frauds ever committed. 
  • Apple is also working on a movie based on Sam Bankman-Fried’s activities in the run-up to FTX’s implosion.

Streaming giant Amazon has partnered up with famed directors Anthony Russo and Joseph Russo, also known as the Russo brothers, to release an eight-part TV series based on the spectacular collapse of Bahamas-based crypto exchange FTX.

Amazon will begin production in spring 2023

According to a report by Variety, the streaming firm has teamed up with AGBO, the production company of the Russo brothers who are known for their involvement with several Marvel movies. David Weil is set to be the executive producer of the show, in addition to writing the pilot. The show will go into production in spring 2023 and will be based on “insider reporting” by journalists who covered the downfall of what was once the world’s second-largest crypto exchange. 

This is one of the most brazen frauds ever committed; It crosses many sectors – celebrity, politics, academia, tech, criminality, sex, drugs, and the future of modern finance. At the center of it all sits an extremely mysterious figure with complex and potentially dangerous motivations. We want to understand why.” the Russo brothers said.

Amazon is reportedly trying to get the famed duo to direct the series as well. 

Apple is nearing a deal for book rights on SBF & FTX

Fellow streaming firm Apple is also looking to get a piece of the FTX pie. According to a report by Deadline, Apple is about to close a deal for the book rights to Michael Lewis’ story about the fall of Sam Bankman-Fried and his crypto empire. 

Michael Lewis is known for several books that were adapted into popular movies like Moneyball and The Big Short. Lewis had been following Bankman-Fried for six months before his exchange imploded, taking down several companies with it. The deal is reportedly in the mid-seven figures range and is expected to be adapted into a feature film. 

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