FTX and its founder Sam Bankman-Fried may be having a lot more than money problems in the future.
The report claims that authorities in the U.S. requested more information about what was uncovered by Binance in their due diligence investigation into the failing FTX. Binance is the world’s largest cryptocurrency exchange. Its founder, Changpeng Zhao, or CZ for short, announced just two days ago that it entered a non-binding agreement to take over FTX, the fourth-largest global crypto exchange. The deal was dependent on the results of due diligence.
Just one day later, Binance announced it was backing out of any deal with FTX, claiming “the issues are beyond our control or ability to help” FTX and its customers. U.S. and European regulation officials as well as the DOJ would like to know more about those “issues” that Binance found.
Binance’s canceled bailout for FTX comes just days after multiple reports published questioning the liquidity of the crypto empire run by Sam Bankman-Fried, who also goes by SBF. News spread about the possibility of SBF’s trading firm, Alameda Research, being insolvent. Upon seeing the reports, CZ announced over the weekend that Binance was selling its holdings of FTX’s token FTT. Soon others followed suit and $6 billion was withdrawn by FTX customers within a 72 hour period.
As the Wall Street Journal reported on Thursday, Alameda owes FTX $10 billion in loans which were funded by the crypto exchange’s customers’ deposits.
FTX founder SBF broke his silence on Thursday morning, placing the blame on his bad math for the issues FTX and its customers face.
What wasn’t mentioned? The improprieties and potentially illegal practices being conducted that multiple news outlets have now reported on.
And what made Binance hightail it out of the deal just hours after looking into FTX’s books? We may soon find out.