7 December 2022

Binance CEO Explains Situation With FTX — Says ‘We Did Not Master Plan This’

Binance CEO Explains Situation With FTX — Says 'We Did Not Master Plan This'

Binance CEO Changpeng Zhao (CZ) has shared where his company is at on the deal with FTX. “We did not master plan this or anything related to it,” he told the Binance team, reminding them not to trade the FTX token (FTT) as the due diligence for the acquisition is still ongoing. He further stressed that “FTX going down is not good” for anyone in the crypto industry, warning that regulators will “scrutinize exchanges even more.”

Binance’s CEO Informs Employees About FTX Deal

The CEO of cryptocurrency exchange Binance, Changpeng Zhao (CZ), tweeted Wednesday a note he sent a few hours prior to all members of the Binance team globally. “Given the events that transpired over the last couple of days. I want to reiterate a few points,” he began, emphasizing:

We did not master plan this or anything related to it.

Zhao explained that FTX CEO Sam Bankman-Fried (SBF) called him less than 24 hours ago. “I was surprised when he wanted to talk. My first reaction was, he wants to do an OTC deal … But here we are,” CZ detailed, claiming to have “very little knowledge of the internal state of things at FTX” prior to the call.

The Binance boss proceeded to remind his team not to trade the FTX token (FTT) right now, elaborating:

As the due diligence for the deal is on-going, I want to remind everyone: DO NOT trade FTT tokens. If you have a bag, you have a bag. DO NOT buy or sell.

He noted that immediately after finishing the call with Bankman-Fried, he asked all members of the Binance team to “stop selling as an organization,” adding: “Yes, we have a bag. But that’s ok. More importantly, we need to hold ourselves to a higher standard than even in banks.”

The Binance chief also reminded his team not to comment on the FTX deal both publicly or internally. “If you are not directly involved, don’t ask. We have got a good team handling it. Things will play out,” his note reads.

Zhao further warned:

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 scrutinize exchanges even more. Licenses around the globe will be harder to get. And people now think we are the biggest and will attack us more,” the Binance executive cautioned.

“But that’s OK, we are used to being open and leaning into headwinds. In fact, we embrace scrutiny. We must significantly increase our transparency, proof-of-reserves, insurance funds, etc.,” he stressed.

The crisis at FTX unfolded when CZ announced via Twitter that Binance is dumping all of the FTT tokens on its books due to “recent revelations.” Zhao then announced a couple of days later that FTX asked Binance for help due to “a significant liquidity crunch,” adding that his exchange intends to “fully acquire” ftx.com and “help cover the liquidity crunch.”

What do you think about CZ’s note to the Binance team? Let us know in the comments section below.

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