The world’s largest cryptocurrency exchange by trade volume, Binance, responded to accusations made by the Treasury Committee of the British Parliament by stating that they did not purposefully harm rival cryptocurrency exchange FTX.
Binance
While it was found that FTX had engaged in some financial irregularities, which caused them to dramatically cut their exposure.
During a meeting on November 14th, members of the Parliament’s Treasury Committee questioned Daniel Trinder, Binance’s vice president of European government affairs, about his company’s involvement in the FTX scandal.
The Committee also questioned Trinder on whether Binance was aware of the risk when it agreed to buy FTX but later withdrew its offer after unloading the majority of its FTT shares on the market.
Daniel Trinder, a witness, asserted before the Committee that his organization did not aim to initiate a collapse and that these precautions were meant to protect its users. He added that the business would offer the necessary evidence in the form of papers.
The business handed a five-page report explaining the sequence of events that led to the FTX collapse on November 15th to the Parliament’s Treasury Committee after promising to do so during a hearing on Monday.
Additionally, lawmakers in the U.S. are looking into Binance’s involvement in the demise of FTX, per a recent article. North Carolina Republican Representative Patrick McHenry asserted that Congress had been keeping a close eye on this matter. It will also probably be discussed extensively at the next congressional hearing.
Binance Five-Page Outline Of The FTX Crash
Per the document, CoinDesk first reported on the financial difficulties surrounding FTX on November 2nd, causing investors and holders of FTT to worry about the financial viability of FTX and its token, FTT.
Among the concerned ones to take notice of FTT was Binance’s CEO (CZ), who announced that he would sell off his remaining stocks shortly after the report came out.
The document claimed that:
The announcement referred to the fact that Binance would endeavour to liquidate its position in a way that minimised market impact, and that due to market conditions and limited liquidity, Binance expected this to take a few months to complete.
FTX’s CEO, Sam Bankman-Fried, contacted Changpeng Zhao to inquire about acquiring FTX; this resulted in both parties agreeing to enter into a non-binding letter of intent for FTX.
After that initial review of their finances and some news about regulatory investigations against FTX for misusing customer funds, they decided to pull out of the deal and declare it publicly.
By the document:
It is clear from the above that the causes of the collapse of FTX were the financial irregularities and possible fraud initially reported in the CoinDesk article on November 2nd, which presumably long predated that article.
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