Sam Bankman-Fried, the creator of the cryptocurrency exchange FTX, contacted Changpeng Zhao to request assistance in early November, just days before the business declared bankruptcy.
One who was privy to the conversation claims that Mr Bankman-Fried texted Mr Zhao, “I don’t know how things got so nasty between us.” “I need your assistance to benefit the business and users.”
At first, Mr Zhao, the creator of Binance, the biggest cryptocurrency exchange in the world, agreed to purchase FTX to preserve it. Mr Zhao then changed his mind after reviewing FTX’s financial records, and Mr Bankman-Fried was left with little alternative except to declare his business bankrupt.
Following American authorities’ filing of criminal allegations against him, Mr Bankman-Fried was detained on Monday in the Bahamas.
With FTX’s demise, Binance can openly show its legitimacy to investors and authorities. Mr Zhao, often known as CZ in the cryptocurrency world, recently tweeted soothing messages to his eight million followers, positioning himself as the industry’s rescuer.
Bitcoin is still alive. On November 20, he wrote, “We are still here.”
Binance has hired several American executives to increase its credibility in the US. US, a Palo Alto, California-based division of it.
Binance.US launched a political action committee just ten days after FTX failed, suggesting that Mr Zhao may set the stage for a more robust lobbying presence.
But making Binance the new, trustworthy face of cryptocurrency will be difficult. The exchange has been beset by accusations of impropriety since its founding in 2017.
Customers have filed lawsuits against Binance for breaking securities laws and misusing their private information. According to a press source, it is also being looked at by the Department of Justice and American regulators.
They were considered as part of a larger inquiry into the cryptocurrency industry’s compliance with international anti-money laundering rules.
After a brief career in finance, which included a spell at Bloomberg, where he developed trading software, Mr Zhao created Binance. When he was a resident in Shanghai, he started the exchange.
But soon after, the Chinese government outlawed the operation of cryptocurrency exchanges like Binance, and a large portion of the company’s staff left the country. Despite keeping an active Twitter account, Mr Zhao can be challenging to find because of his frequent moves between Japan, Singapore, Lithuania, Malta, and Dubai.
When compared to its competitors, Binance is a giant. According to one industry data tracker, before FTX’s demise, the trading volume of cryptocurrencies on Binance alone was more than the sum of its seven closest rivals.
On November 10, the day before FTX filed for bankruptcy, Mr Zhao presented himself as the crypto industry’s sage in a group conversation featuring Mr Bankman-Fried.
According to screenshots acquired by The Times, he charged the creator of FTX that would threaten the stability of the larger crypto market. He said, “Stop right here, don’t do any more harm.” “The more harm you cause right now, the more time in jail.”
But at last, we can say that the information doesn’t convince the rivals of Binance.