In a submission to the U.K. Parliamentary Treasury Committee, Binance denied that it deliberately sought to sink competitor crypto exchange FTX, but added the company’s financial irregularities led Binance to reduce its exposure.

See related article: Binance to sell FTX token holdings amid questions over Alameda finances 

Fast facts

  • Binance sent a five-page document to the Parliament’s Treasury Committee outlining the sequence of events that led to the FTX crash. 
  • The Binance document was prompted by a question from committee chairwoman Harriett Baldwin, who asked pointedly if Binance CEO Changpeng Zhao “brought about the collapse of FTX?”
  • Binance said it concluded the reason for FTX’s collapse was that financial statements disclosed by the media showed the exchange’s financial irregularities and possible fraud, and these irregularities may have predated the report.
  • Binance says the potential collapse of FTX prompted Binance to liquidate its FTT holdings to reduce its exposure to risky assets.
  • On Monday, the Parliament’s Treasury Committee held a hearing where lawmakers questioned Daniel Trinder, Binance’s vice president of European government affairs, about Binance’s role in the FTX saga, including whether Binance apparently thought the sale of its FTT holdings would trigger the FTX collapse, according to a Bloomberg report.
  • U.S. lawmakers are also investigating Binance over its responsibility in the FTX collapse. North Carolina Republican Rep. Patrick McHenry said Binance’s role in the saga has come under congressional scrutiny. The issue will be one of the main topics in a congressional hearing next month, according to a report by The Block at Hong Kong time Thursday.

See related article: U.S. regulators reportedly talking with Binance over failed FTX bail out