FTX CEO Apologizes to Investors over Transparency Issues in Binance Deal

UTC by Sanaa Sharma · 3 min read
FTX CEO Apologizes to Investors over Transparency Issues in Binance Deal
Photo: Depositphotos

The address is a follow-up to the company’s massive struggle to stay afloat with the breakdown of its native FTT token, along with a run on the exchange that eventually led to the company having to pause all withdrawals.

FTX has made news yet again, but not for the right reasons this time. FTX CEO Sam Bankman-Fried recently seemed to apologize to investors for not being completely transparent about its financial deal with Binance. In a letter cited by several sources, it was stated that the elements of a non-binding accord for Binance to purchase FTX.com are yet to be completely decided upon.

Bankman-Fried apparently mailed the investors, conveying his apologies for being difficult to reach out to in the past couple of days. He also maintained that the security of the company’s customers along with the interests of the stakeholders was his priority. The letter said that while the details of the agreement are still being chalked out, Ramnik Arora (the head of product at FTX) will be available for any questions/queries.

The address is a follow-up to the company’s massive struggle to stay afloat with the breakdown of its native FTT token, along with a run on the exchange that eventually led to the company having to pause all withdrawals. As Binance entered the lost cause ready to buy the company, the markets dived with FTT falling to more than eighty percent.

This deal move by Binance will allow institutional clients to skip the tedious onboarding procedure, while the company will have access to the FTX talented employee base. According to Steven Zheng, a researcher at The Block, Binance’s move is a sound amalgamation of both technology and availability of FTX’s strong engineering team. FTX, in itself, is a big exchange, and politically helping a company stay afloat should also seem reasonable. Moreover, FTX’s acquisition can boost Binance’s market share to eighty percent.

Even though aid from Binance seems like the best option for FTX, investors will have to wait in uncertainty before the actual terms and conditions are chalked out.

Jeremy Allaire, the co-founder, and Chief Executive Officer has something to say about the FTX drama too. According to Allaire, the recent insolvency trouble is another “Lehman Brothers” moment for the crypto industry.

Lehman Brothers were known in 2008 to have initiated the international financial crisis. The fifty-one-year-old CEO described his disappointment that the technology created as a solution to Lehman Brothers’ case has been instrumental in invoking another rendition of the same problem.

In addition, Allaire maintained that his company won’t be affected by the downturn in the virtual market space, as any contagion that would wrongly affect the largest stablecoin in crypto would be apocalyptic. The present market collapse also brings out the ugly features of the crypto space, with intrinsic concerns over transparency, counter-party visibility, and non-transparent firms retaining balance sheets with hypothetical tokens.

Blockchain News, Business News, Cryptocurrency news, Deals News, News
Sanaa Sharma
Author Sanaa Sharma

Sanaa is a chemistry major and a Blockchain enthusiast. As a science student, her research skills enable her to understand the intricacies of Financial Markets. She believes that Blockchain technology has the potential to revolutionize every industry in the world.

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