CEO Changpeng Zhao informed employees that the near-collapse was unplanned and would likely result in additional regulation.
One day after it was reported that Binance could buy the non-U.S. assets of FTX in response to a liquidity crisis, CEO Changpeng Zhao informed colleagues that the near-collapse was unplanned and would likely result in greater regulatory attention.
Zhao stated in a memo to Binance staff that he subsequently released on Twitter, “We did not master plan this or anything connected to it.” “The decline of FTX is detrimental to the whole industry. Do not consider this a “victory for us.”
The deal’s announcement stunned the cryptocurrency sector on Tuesday, prompting a widespread selloff of digital assets. While Zhao initiated the commotion over the weekend by announcing that his exchange will clear its position in FTX’s FTT token, he requested that workers abstain from trading it. The Financial Times was the first to report on the employee memo.
“If you have a bag, you have a bag,” Zhao remarked in reference to his conversation with FTX CEO Sam Bankman-Fried yesterday. “NEVER purchase or sell. As soon as I concluded yesterday’s conversation with SBF, I instructed our staff to cease selling as a group. We do possess a bag. But that is acceptable.”
Zhao said that due diligence for the purchase proposal is proceeding and requested that personnel refrain from discussing the transaction publicly. He said that a “strong team” was managing the deal.
In addition, the CEO of Binance projected that global authorities will monitor exchanges far more strictly in the aftermath of the FTX crash.
“Regulators will monitor exchanges much more closely,” Zhao wrote, instructing his workers to disregard pricing and concentrate on producing items. “Globally, licenses will be difficult to get. And now that people believe we are the largest, they will attack us more often. However, we are used to being exposed and leaning into headwinds.”
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