Binance CEO Explains Why FTX Collpased

As you probably know by now, the crypto market suffered a terrible crash following the FTX collapse. Now, the CEO of Binance reveals the reasons why the crypto exchange collapsed.

The CEO of the world’s largest crypto exchange is revealing why the potential deal with former competitor and bankrupt firm FTX failed to go through.

During an interview at the 2022 Indonesia Fintech Summit, Changpeng Zhao said that rescuing FTX from bankruptcy did not make sense for Binance from both business and legal standpoints.

“From our perspective, the deal did not make sense from a numbers front. From a financial perspective, it’s a big hole. From new users, we have very high overlap. We cover all the regions they cover, and they have much less users than us. From a technology or product perspective, I think we have a superior product. They don’t have anything that we don’t have.”

He continued and said the following:

“So our original intention was to save the users. But then the news of misappropriating user funds, especially US regulatory agencies investigations, we’re like, ‘Okay, we can’t touch that anymore.’”

CZ also said that the analogy that crypto is witnessing a 2008-like market meltdown is “probably accurate.”

It’s been just revealed that the team behind Chainlink (LINK) says the decentralized oracle network is offering a service that can address the transparency issues in the crypto industry after the recent FTX disaster.

Chainlink Labs noted that the blockchain’s Proof of Reserve Solution (PoR) is designed to prove the reserve data of projects and organizations. It’s important to note that these include  exchanges, stablecoins, and traditional financial institutions.

The system works by automatically updating on-chain smart contracts. This happens when the balance in reserves changes.

Stay tuned for more news from the crypto space.