According to The Wall Street Journal, at the heart of FTX’s problems lies a conflict between the two founders of each respective company. Sam Bankman-Fried, the founder of FTX, and Changpeng “CZ” Zhao, the founder of Binance, have allegedly been involved in some kind of drama. The two haven’t commented on the matter, but rumors such as this Twitter thread suggest that something led Zhao to publicly announce that he will be getting rid of Binance’s entire $2 billion worth of FTT. Zhao also expressed doubt in the stability of FTT, comparing the choice to liquidate to LUNA, a token that completely collapsed just a few months prior.
Unsurprisingly, when the crypto world heard about Binance’s choice to get rid of FTT, many rushed to sell it before value was completely wrecked. The price of FTT steadily dropped over the last few days. According to Coingecko, while FTT had a steady price up until Nov. 8, it fell off a cliff during the course of the day, dropping from around $21 to $5. The crypto exchange had to pause withdrawals for a while as rumors about the company’s solvency, or rather, lack thereof, grew even louder.
This brings the FTX exchange full circle. After Bankman-Fried reached out to Zhao, the two crypto leaders came to a non-binding agreement, seemingly putting their differences aside. Binance is, in all likelihood, buying out FTX. After being its first investor, it might also be its last, provided that the deal does go through as reported by both Bankman-Fried and Zhao. In the meantime, Zhao says: “We expect FTT to be highly volatile in the coming days as things develop.”
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