December 7, 2022

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FTX's Sam Bankman-Fried Fall Puts Crypto Industry on Edge

FTX’s Sam Bankman-Fried Fall Puts Crypto Industry on Edge

FTX declined to comment on Binance’s withdrawal from the deal. In a message on Slack to employees seen by The New York Times, Mr. Bankman-Fried said: “I am working as quickly as possible on the next steps here. I wish I could give you more clarity than I can. I totally understand if you want to walk away, and I don’t blame you.” Absolutely on that.”

Mr. Bankman-Fried has fallen into the hands of Changpeng Zhao, CEO of Binance, the only cryptocurrency exchange larger than FTX. After reports emerged that one of Mr. Bankman-Fried’s other affiliates was on shaky financial fundamentals, a Twitter post by Mr. Zhao, better known online as CZ, essentially initiated a banking management that crippled FTX. On Tuesday, Binance announced that it has agreed In principle to buy its biggest competitor.

“CZ has implemented a pincer movement,” Reiners, a cryptographic expert who teaches at Duke University School of Law, told me. “We were all surprised.”

Unlike some of the other crypto companies that collapsed this year, FTX was almost completely mainstream. Mr. Bankman-Fried ran a commercial during the Super Bowl and bought the naming rights for the Miami Heat basketball stadium. It was actually described All pioneer newsletter outlet, including The Times, and has nearly a million followers on Twitter.

“It’s as if the person you thought was Hermione was Voldemort,” crypto journalist Laura Shen chirp Wednesday.

With the company’s collapse, FTX investors were in the dark about Mr. Bankman-Fred’s plans, and employees had little guidance. Other companies have distanced themselves. Alicia Haas, chief financial officer of the US cryptocurrency exchange, wrote in Blog post. “Our Customer Origins 1:1.”

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In a note to Binance employees posted on Twitter, Mr. Zhao He said FTX’s demise is “not good for anyone in the industry.”

“Regulators will examine exchanges more closely,” he wrote. “It will be more difficult to obtain licenses worldwide.”

This is an evolving story. Check back for updates.