Tuesday, January 31, 2023

According to Kevin O’Leary, Binance caused the FTX crash

In an appearance before the US Senate Committee on the Derivatives Exchange Collapse on December 14, investor Kevin O’Leary claimed that the FTX crash was initiated by Binance. O’Leary, who was a paid spokesman for FTX, gave details about conversations with Sam Bankman-Fried in the days before FTX filed for bankruptcy.

In his testimony, O’Leary said that he had asked Bankman-Fried how client funds had been used over the past 24 months and He was told that approximately $3 billion was used to buy back native FTX tokens owned by Binance.

when the senator patrick tommy When asked why FTX failed, O’Leary replied: “I have an opinion. I don’t have the records”, before revealing his opinion that the heads of Binance and FTX were at war.

O’Leary said regulation was at the center of a silent war between the heads of the two exchanges. Binance and Changpeng Zhao, as shareholders with approximately 20% of FTX, had to comply with requests from regulators and control regulations in various jurisdictions.

“Apparently, according to Sam Bankman-Fried, Chanpeng Zhao did not respond to requests from regulators in various jurisdictions to provide data authorizing them [a FTX] to get a license […] The only option was for management and Sam Bankman-Fried to buy out their shares at an extraordinary valuation of close to $32 billion.”

The share purchase hurt FTX’s balance sheet, O’Leary said, citing Zhao’s decision to liquidate Binance’s position in the FTX token (FTT) in early November. “recent revelations” and reason “Risk Management After Departure”, Its purpose was to reduce the price of the token. O’Leary said:

“From my point of view, my personal opinion, these two […] in an unregulated market […] With this incredible business in terms of growth they were at war with each other, and one deliberately drove the other out of the market. Now, maybe there’s nothing wrong with that, maybe there’s nothing wrong with love and war, but Binance is now a massive unregulated global monopoly, and they shut down FTX.”

O’Leary also spoke in favor of a regulatory framework for cryptocurrency during his speech:

“This nascent industry is dwindling its herd. Inexperienced or incompetent managers, weak business models and unregulated unscrupulous traders are gone or gone. Hopefully these highly publicized developments will bring attention back to national enforcement, which stagnated for years Other jurisdictions have already implemented these types of policies and are now attracting both investment capital and highly skilled talent. In the US, we are falling behind and losing our leadership position.”

As a paid spokesperson for FTX, O’Leary received approximately $15 million for his services. Apparently, due to the accident, he lost $10 million worth of tokens held in an FTX wallet.

the explanation: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be construed as financial advice or investment recommendation. All investments and commercial dealings involve risk and it is the responsibility of each individual to conduct appropriate research before making any investment decision.

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Nation World News Desk
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