Binance Sees A Chance To Alter The Face Of Cryptocurrency As The FTX Collapse
With FTX’s demise, Binance has a chance to establish its credibility with investors and regulators publicly. Mr. Zhao, also known as CZ in the cryptocurrency community, recently tweeted reassuring messages to his eight million followers, positioning himself as the industry’s savior.
“#bitcoin is not dead. We are still here,” he wrote on November 20.
Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, contacted Changpeng Zhao to ask for assistance in early November, just days before the exchange declared bankruptcy.
According to a person who knew the conversation, Mr. Bankman-Fried texted Mr. Zhao, “I don’t know how things got so bad between us.” “I need your assistance to benefit the business and users.”
At first, Mr. Zhao, the founder of Binance, the biggest cryptocurrency exchange in the world, agreed to give a loan and purchase FTX to save it. Mr. Zhao later changed his mind after looking over FTX’s financial records, and Mr. Bankman-Fried was left with no choice but to declare his business bankrupt. After filing criminal charges against him by American prosecutors, Mr. Bankman-Fried was detained on Monday in the Bahamas.
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The founders of the two largest cryptocurrency exchanges have a complicated relationship that occasionally involves them sparring in public and making fun of each other on Twitter. Mr. Zhao’s actions were the culmination of that relationship. Their divergent perspectives on the cryptocurrency industry, including whether and how it should be regulated, held considerable sway as the rapid growth of their businesses made both of them into paper billionaires, particularly as governments around the world prepared to retaliate.
However, Mr. Zhao and Binance retained a low profile. At the same time, Mr. Bankman-Fried ran a highly visible campaign to court lawmakers and shape cryptocurrency regulation in the United States while spending lavishly on advertising to promote the FTX brand.
Mr. Zhao, who once referred to regulation as a “risk” for his business, largely shied away from interacting with legislators outside of nations that supported cryptocurrencies. Nevertheless, Binance started taking action in the past year to clean up its reputation as a mysterious giant without a headquarters who occasionally breaks the law, realizing that regulation was inescapable.
Mr. Zhao also couldn’t help but poke fun at his opponent.
Binance recently announced it had acquired a Japanese cryptocurrency exchange, enabling it to enter the Japanese market “as a regulated entity” to dispel the perception that it has circumvented regulations.
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