Binance’s CZ says he should have tweeted sooner about FTX woes

The chief executive officer of the world’s largest cryptocurrency exchange, Binance Global Inc., Changpeng Zhao, regrets not sending earlier a tweet that contributed to the collapse of Bahamas-based crypto exchange FTX, he said in a live interview on Bloomberg TV on Thursday.

See related article: CZ vs. SBF tweet exchange is no ‘fight,’ Binance CEO claims

Fast facts

  • “I actually reflect on the FTX situation and I kind of blame myself for tweeting that too late. As an industry, we let FTX get too big before we started questioning some of those things,” Zhao said.
  • On Nov. 8, Zhao announced via Twitter that Binance would slash all FTT tokens, the native token of FTX, on its books due to “recent revelations,” kickstarting a run on FTT. The revelations he mentioned were from a report by crypto media outlet CoinDesk that suggested FTX’s brokerage for trading crypto, Alameda Research, might have had liquidity issues.
  • As Zhao’s tweet followed the publication of the report, his comments yesterday suggest he may have had some prior understanding of the situation.
  •  Zhao’s comments follow pledges from the industry to increase the transparency of their operations, including from Zhao himself, who tweeted Thursday: “Crypto industry will be more transparent than traditional finance industries.”
  • The CEO also said that he expects to see a “little bit of contagion” from FTX as concerns mount that crypto trading firm Genesis Global Trading risks soon filing for bankruptcy as well. “Whenever one big player goes down, especially a trading platform, there are many other people or institutions with money on the platform,” he said.
  • Zhao also said that Binance is setting aside roughly US$1 billion to possibly buy distressed assets from FTX, but will wait for all necessary investigations to be complete and for them to become available through liquidation court before bidding. 

See related article: Genesis crypto broker freezes withdrawals; Winklevoss’s Gemini, S. Korea’s GOPAX exchanges affected

By Janet J

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