Binance CEO opens up about circumstances surrounding FTX deal, crypto exchange’s downfall
Yahoo Finance crypto reporter David Hollerith details Binance CEO Changpeng Zhao's plan for a relief fund for developing crypto projects, in addition to the crypto executive explaining the behind-the-scenes observations in FTX's collapse.
Video Transcript
- The fallout from the crypto exchange FTX's collapse continues to unfold. And other players in the space like Binance, who offered to buy the troubled firm at the start of last week, are now working to calm anxieties throughout the space. Yahoo Finance's David Hollerith here with the details. David, what's the latest?
DAVID HOLLERITH: Yeah. Early this morning, Binance's CEO Changpeng Zhao announced that Binance would start a relief fund to help crypto projects facing a cash shortage after the rival exchange FTX filed for bankruptcy. Over Twitter, Zhao, quote, said he was welcoming other industry players with cash to co-invest in this relief fund. And later at a conference in Bali, Indonesia this morning, Zhao had this to say.
CHANGPENG ZHAO: I think they were lying. They lied. FTX lied. I think Sam lied to his employees, his users, his shareholders, the regulators all around the world, and all the users. So, yes, he should take the most of the blame. But at the same time, every the VC investors, including us, why did we invest them? I think that accusation was actually somewhat accurate. All the existing investors that invested in FTX made a mistake. And many of them are very professional investors. Why did they not discover this problem? Some of them are very large funds. Why did they not discover this problem?
DAVID HOLLERITH: I'll point out too that FTX has invested money in more than 70 other companies. And Zhao, of course, was involved in a public fight with FTX founder Sam Bankman-Fried. And that dispute was part of the chain of events that sort of led to the company's bankruptcy filing.
- Strong words there from CZ. What about other firms, David, with exposure to FTX?
DAVID HOLLERITH: Yeah. So there are major venture capital firms. And that includes Temasek, Sequoia Capital, the Ontario Teachers Pension Fund, and others. And they'll show the biggest losses in terms of exposure right off the bat. But they also sort of-- relative to their other portfolios, it doesn't quite look as bad for them.
Then we have these firms that have their cryptocurrencies stuck on the platform that's now in bankruptcy. And that includes Genesis Training, CoinShares, Galaxy Digital, Wintemute, Crypto.com, and others. And then I also just wanted to point out that BlockFi, a firm that's not a part of FTX's bankruptcy, has said today that it has significant exposure to FTX but has declined to offer further-- as of Thursday night, the company has halted withdrawals for customers.
