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with the fall of FTX we will soon see the “ripple effect” in other companies.



Key facts:
  • According to CZ, FTX’s CEO presented her with a different deal than she expected.

  • What happened with FTX is a devastating event for the bitcoin industry, CZ says.

Chanpeng Zhao, chief executive officer of Binance, the largest bitcoin (BTC) and cryptocurrency exchange on the market by trading volume, said Friday that a “ripple effect” is likely to occur in the short term among companies related to FTX, its main competitor, which just filed for bankruptcy.

In his first public appearance since the FTX debacle, CZ, as the head of Binance is known, declared that the present moment is a time of “consolidation” for his company and that it is likely that in a few weeks we will see the fall of other companies.

With the fall of FTX, we will see ripple effects. BlockFi is bankrupt again. Voyager is also in crisis, although I don’t know what will happen (…) And so, other similar projects will go through similar situations. I think it will be a couple of weeks before that happens.

Chanpeng Zhao, CEO of Binance.

Zhao’s remarks came just hours before it became known that. FTX has officially declared bankruptcy.72 hours after the collapse. A total of 130 conglomerate companies filed for Chapter 11 under the U.S. Bankruptcy Code.

A “no-nonsense” multi-pronged settlement

While attending the Indonesia Fintech Summit 2022, held this week in Bali, the capital of the Asian country, the CEO of Binance took the opportunity to clarify his reasons for abandoning the deal to acquire the collapsed FTX exchange.

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For the entrepreneur, the deal was not convincing and were the investigation for misappropriation of funds which prompted him to withdraw from negotiations.

CZ pointed out that there is a “big hole” in the financial statement of FTX, the exchange that for some time disputed its leadership in the emerging market.

According to CZ, Sam Bankman-Fried (aka SBF), now the former CEO of FTX, proposed a “meaningless” deal on several fronts. In his view, the deal did not yield the results he believed it would, viz. an agreement that would eliminate negative comments and restore user trust..

When FTX’s allegations of embezzlement became known, Binance decided to walk away from the deal. A fact they reported almost automaticallyCZ pointed out at the conference.

Since the beginning of the week, FTX, one of the most representative brands in the Bitcoin ecosystem, collapsed. In general, this is all due to mismanagement of funds by the U.S. company.

According to CZ, what happened with FTX. is a devastating event for the bitcoin industry.especially as consumer confidence suffers. In his view, “we have gone back a few years” with the fall of the stock market.

He stresses that, in the wake of what happened with FTX, regulators will probably are likely to look more closely at the ecosystem. “We will be subjected to a lot more scrutiny on these fronts, but this is good for the industry,” he said.

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