The Binance CEO now owns one of his biggest competitors after a series of very calculated moves
These few days have been rather intense in the crypto sphere. Fear, uncertainty, and doubt all reared their head and formed the FUD monster that has always been a thorn in the side of investors and developers. As the smoke clears once again Binance comes out bigger and more powerful than before and Sam Bankman-Fried, a man who once stated that he wanted to give away his fortune, successfully does so, though it may not have been in the way that he wanted.
It would appear that Binance CEO Changpeng ‘CZ’ Zhao was playing chess with Sam Bankman-Fried’s checkers showcasing moves that can only have been learned from extensive reading of Sun Tzu’s Art Of War. Either CZ is a brilliant tactician, a psychic, or he had some sort of insider info as to what was going to happen at FTX because his move with the FTT token was inspired.
Binance had a stake in FTX from the very beginning. At one time that stake was bought back by Sam and FTX utilizing FTT tokens and stablecoins — a move that would turn out to be costly for Alameda Research, FTX, and Sam Bankman-Fried. More moves had been made by SBF that eventually led to a liquidity crisis within the company and FTX having to be saved by Binance via a non-binding letter of intent.
Sam Bankman-Fried made a lot of moves that seemed questionable, which upon looking back on, could be seen as moves that were meant to save face and his company. Sam began focusing heavily on the regulation of crypto and centralized exchanges. This move can now be seen somewhat as a last-ditch attempt to put the brakes on the monumental growth of FTX’s greatest rival, Binance. This appears to have backfired as more of the crypto community was against SBF and his regulation efforts. Another bad move was having the balance sheet of Alameda Research be full of FTT tokens noting that the company rests on a foundation of a coin created by a sister company and not an independent asset. A majority of the net equity of the Alameda business was the centrally controlled and “printed-out-of-thin-air” token. Among other tokens was a large amount of Solana as well with $292 million of “unlocked” SOL , $863 million of “locked” SOL, and $41 million of SOL collateral per a report made by Coindesk.
These moves set into motion other events such as Binance selling off all of its FTT tokens and offloading millions from FTX, this was followed by other entities removing their funds from the platform as well due to speculation and FUD. CZ stated he felt FTX was just another Luna waiting to happen and removing his holdings from the company was just an exit strategy. If Alameda Research and FTX were in a financial crisis the killing blow was indeed the one made by CZ.
This move by CZ and the FUD created from the move left FTX in a precarious situation, there was no way out and the one with all the power was indeed the one that helped start the company in the first place-Binance.
In one fell swoop, CZ took out his competition and made his company even larger than before. The move came after a feud and flurry of texts between the two gentlemen. In the end, the result may look amicable but a closer inspection of the gears that put all of this into place showcases a bit of cunning on the part of CZ, truly if this were wartime the Binance CEO would be one formidable general.
Binance is moving in to save clients of FTX but this probably is more so in the better interests of Binance than it is FTX as a complete failure of the crypto ecosystem would be terrible for business. The purchase of FTX becomes less of an altruistic gesture and more of a basic necessity with the benefit of crushing your biggest competitor. Binance now has the full roster of companies purchased by FTX as well and at this point has become so massive that there may be nothing to stop its dominion in the centralized exchange race.
The deal was based mostly on the fact that Alameda Research and FTX were too reliant on a token that had no real liquidity. Changpeng went to Twitter to state that he saw similarities between FTX and Luna and was backing out. Some have questioned the timing of the situation as it couldn’t be just now coming to light but others have stated that was exactly the case.
The decision made by CZ pushed down the price of FTT and prompted the CEO of Alameda, Caroline Ellison to tweet an offer for all of Binance’s FTT token at a $22 price per token.
This move did not help and instead led to more questioning of the team and why things were the way they were.
As customers rushed to withdraw their funds from FTX many complained that they had difficulties doing so which mimicked the situation of many other failing crypto companies.
FTX is done and Binance has agreed to purchase it. The deal was announced in a flurry of tweets and FTX which was valued at $32 billion will be purchased by Binance which is the biggest crypto exchange by volume. The financial ters of the transaction were not given though one could assume CZ got the company at a discount. FTX US is not part of the deal as a US-based crypto company probably would not necessarily be a good investment at this time.
One other major centralized exchange, Coinbase was rumored to be in the market to purchase FTX but when asked by Bloomberg Technology CEO Brian Armstrong denied that rumor but didn’t give a very clear answer as to why.
The moves made by CZ were precise and calculated. The strategy implemented was inspired. This cannot be seen as a hostile takeover, it could possibly be seen as a masterstroke in biding one’s time and waiting for the perfect moment to strike when the opponent reveals their weakness. In the stories, Achilles was a formidable opponent until his weakness was discovered it would seem FTX’s weakness was shown and CZ was the archer that ended its reign.
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