While federal prosecutors are investigating FTX FTT/USD and its founder Sam Bankman-Fried role of fraud binance BNB/USD Founder Zhao Changpeng It is often overlooked in this saga.
Remember when Zhao, known as “CZ” in the crypto world, announced on Twitter that Binance was acquiring FTX? That was when the first cracks appeared on FTX, just days after he communicated his company’s intention to offload its entire FTT token holdings.
If this seemed suspicious, Zhao’s complete U-turn should have sounded the alarm. Binance then scrapped his FTX trading and once the third largest cryptocurrency exchange in the world by trading volume, went bankrupt.
SEE ALSO: Binance deliberately put FTX out of business, says Kevin O’Leary in US Senate testimony
A sketchy deal between FTX and its sister companies, Alameda Research (Using customer assets to conduct risky transactions without authorization) sent shockwaves throughout the crypto world.
Regardless of how the centralized exchange presents itself to the crypto community, the episode remains a mystery as its operations remain shrouded in mystery. reveals the fact that you have full control over
FTX’s lightning-fast collapse threatens to overthrow established crypto companies, and investor confidence is currently eroding within the crypto ecosystem at an alarming pace.
How about another poster boy in the crypto world?
It is important to address Binance’s own financial situation.
when in the US Department of Justice It was reportedly preparing to sue Binance for unauthorized money transfers and money laundering collusion. It claims to have implemented controls.
The investigation stems from Zhao’s actions dating back to 2018 or earlier. Binance had failed to register with the Treasury Department despite its own claims that nearly one-third of its user base at launch was based in the United States.
Related item: Binance CEO warns staff to prepare for bumpy roads
Why Binance May Buckle Under Liquidity Pressure
Aside from Zhao and his team’s mixed reactions to how they have built the strongest company in the cryptocurrency industry, there is nothing to prove that all is well with Binance.
Centralized exchanges like FTX and Binance concentrate enormous power and control in the hands of their founders. It can be said that Bankman-Fried’s negligence led to his FTX bankruptcy, but is there enough evidence to suggest that Zhao may be sabotaging attempts to expose wrongdoing on his part? I don’t know yet.
Losing confidence in Binance, the largest cryptocurrency exchange by trading volume, could lead to a wave of selling pressure, driving bankruptcy and the collapse of the cryptocurrency market.
It may be hard to believe that Binance could succumb to financial misconduct, but while lobbying US lawmakers for looser guidelines, Bankman-Fried It is important to remember how you kept your cool.
Next: Binance Temporarily Suspends USDC Withdrawals Amid Growing Investor Concerns About Reserves
