Image courtesy of Binance Twitter page
- CZ explains that Binance has different ways of doing its ‘bailout’ deals.
- The Binance CEO has always voiced his criticisms about crypto firms ‘bailouts.’
According to Binance CEO, CZ, his company wouldn’t have reached the kind of agreement Alameda Research had with Voyager Digital. Alameda Research is a principal trading firm owned by FTX founder and crypto billionaire, Sam Bankman-Fried.
Last month, the trading firm provided struggling crypto lender, Voyager Digital, with a credit line of $500 million. However, a bankruptcy filing on July 6 revealed that Alameda owes $377 million to Voyager Digital.
When a podcaster interviewed CZ recently and asked for his opinion concerning the matter, the Binance CEO said he was surprised about the deal’s details. He added that he would never do such a thing. “I won’t invest in your firm for you to loan me some money.”
CZ said he would rather not invest in such a company but keep his money. The interviewer probed CZ to comment on other FTX-related deals following the liquidity issues affecting most crypto firms. However, he was reluctant to make any other comments. He said he doesn’t like speaking about the actions of his competitors.
CZ only said the Binance team (which includes himself) always prefers to have straightforward deals. According to him, Binance only invests based on data such as the company’s revenue and the number of users.
He added that Binance doesn’t do deals that involve owing a company some money. Then, pay back the loan and give them more money as bailouts. He said it was better to pay back the loan. Then, discuss the details of a loan arrangement differently.
CZ often criticizes bailouts
CZ has always criticized bailout deals. However, it is the first time he would discuss the details of any bailout deal. It is also the first time he openly stated that he wouldn’t be involved in a particular bailout deal. Nevertheless, the timing of his comments about this FTX deal has some undertone meanings.
Related: FTX CEO Sam Bankman-Fried warns that some crypto exchanges are insolvent already, and more will follow
Within 48 hours of FTX’s announcement of offering blockfi with a $250 million credit line, CZ released a blog post. In the post, he wrote that no one should hold on to bad firms. Instead, such companies should be allowed to fail. He added that several other projects could and will replace them. It is worth noting that this podcast interview with CZ isn’t available to the public yet.
Binance isn’t indebted to any firm – CZ
Meanwhile, the Binance CEO has reassured its users that the exchange has enough crypto reserves for its operations to keep running successfully for many years without a hitch. CZ made the claims in response to comment upon the launch of Binance’s ‘fee-less’ bitcoin (BTC) trading.
Binance’s CEO brushed off any worries that the new service would affect the exchange’s crypto reserves. Recently, he also said that Binance is world-class ahead of its competition. However, he added that the crypto ecosystem is best positioned to decide on the best trading platform. He also said Binance is self-sufficient and has no loans from any other firm.
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