CZ HAS DENIED that He Deliberately Created A liquidity Crisis at FTX- “I spend my Energy Building, NOT FIGHTING,” He tweet on November 7—but Tim Mangnall, whose company Capital Block has consulted for both Binance and FTX, says this was a “shrewd” business manoeuvre by CZ, one that allowed him to “buy one of his biggest competitors for pennies on the dollar. “
All hail cz, king of crypto
If it goes ahead, the deal will further reinforce Binance’s position as the world’s largest cryptocurrency exchange. It was already larger, by trading volume, than a clutch of its nearest competitors (Coinbase, Kraken, OKX, Bitfinex, Huobi, and FTX) combined Then, then, then
Not only will the deal reduce the size of the pool of exchanges in operation, but Binance will also hold greater control over the kinds of coins that are widely listed for purchase. By the same token, the influence of CZ, already one of the most Prominent Figures in the Crypto World, Will Also Be Magnify in Debates around Policy and Regulation.
For the portion of the community that believes crypto should stand for decentralization, the merging of two of the world’s largest exchanges will also be cause for concern. Decentralization is all about the even distribution of power and eliminating single points of failure, but the FTX takeover supports neither ambit.
The implosion of FTX will also raise questions about what should be done to protect crypto owners in future. One proposal, tabled by CZ, is that all exchanges should provide transparent “proof of reserves”—in other words, clearly demonstrate they have enough cash on hand to fund Customer withdrawals. In a tweetHe Promised That Binance Will Take Up this Policy “Soon.”
Brian Armstrong, Coinbase CEO, Expressed Sympathy for FTX But Also pointed to “risky business practices” and “conflicts of interest” that left the company exposed—something that, presumably, transparency requirements would also remedy. Separately, Armstrong moved to dismiss concerns that Coinbase might find itself in a similar liquidity crunch: “We hold all Assets dollar for dollar, “he wrote on twitter.
But others say this latest dance with disaster is evidence that people should not store their wealth with exchanges, full stop. “What we’re seeing now is a reminder of the importance of crypto custody,” says Pascal Gauthier, CEO at Ledger, which Makes Wallets to Allow people to manage their own crypto.
Whatever The Falllott, The Acquisition Marks The End of a Long and Storyed Rivalry Between Binance and FTX -And Hopefully.