Binance CEO says he did not ‘grasp plan’ FTX collapse

Binance CEO Changpeng Zhao said on Wednesday that he “didn’t grasp plan” the collapse of rival crypto alternate FTX.

In an e mail to workers that he made public, Zhao mentioned FTX taking place “just isn’t good for anybody within the trade” and that workers mustn’t “view it as a win for us.”

The memo comes a day after Zhao introduced that Binance, the world’s largest cryptocurrency agency, had reached a non-binding cope with Sam Bankman-Fried’s FTX to purchase the alternate’s non-U.S. companies for an undisclosed quantity, rescuing the corporate from a liquidity disaster. Earlier this 12 months, FTX was valued at $32 billion by non-public traders.

Since information broke of the settlement, FTX’s native token FTT has plummeted to $3.50, down from round $25 every week in the past. Zhao contributed to the decline, when he introduced publicly over the weekend that Binance was promoting its FTT holdings.

Zhao mentioned within the memo that Binance workers mustn’t purchase or promote FTT.

“DO NOT commerce FTT tokens,” Zhao wrote within the letter. “When you have a bag, you may have a bag. DO NOT purchase or promote.”

Zhao added that person confidence is severely shaken, and that he anticipated the onslaught of regulatory scrutiny of exchanges to rise due to the turmoil. FTX didn’t reply to CNBC’s a number of requests for remark.

Traders turned bearish on digital belongings this 12 months amid a spate of failures, however FTX is the largest domino to fall, and its descent got here with surprising pace.

Bitcoin dropped greater than 7% Wednesday, buying and selling under $17,000, and the general market cap of tokens is right down to $840 billion, the bottom in years.

Zhao mentioned Binance plans to considerably enhance its transparency, proof of reserves and insurance coverage funds.

WATCH: Crypto traders nonetheless rattled by FTX liquidity