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.
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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.
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