CZ on Why The FTX Deal Fell Through

FTX has lost several potential rescuers after shady details of the internal workings continue to emerge. The biggest setback was Binance pulling out of the deal.

But according to the crypto giant’s CEO, the deal with FTX did not make sense.

• While speaking at the Indonesia Fintech Summit, Changpeng “CZ” Zhao weighed on the takeover that never materialized and the reason behind it.

“From a financial perspective, there is a big hole. From new users, we have very high overlaps. 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 we don’t have.”

• According to CZ, the original intention was to “protect” the users. However, the reports of misappropriating user funds as well as probes from US regulatory agencies prompted Binance to call off the takeover.
• The exec also said that there will be shift in regulatory perspective.
• Earlier, watchdogs were more concerned about KYC/AML compliances. But with FTX going down, the focus will be on exchange operations, business models, and proof-of-reserves.
• Bankman-Fried had reportedly approached stablecoin issuer Tether, crypto exchange  and Kraken OKX as well as venture capital firm Sequoia Capital for $1 billion or more from each of the platforms.
• Tether CTO Paolo Ardoino confirmed that having no plans to invest or lend money to FTX or its sister trading company, Alameda, which is at the center of the debacle.