Since the company’s founding, Sam Bankman-Fried claims he has wanted to sell FTX to Binance.

Sam Bankman-Fried told the court during his evidence on Friday that he had planned to sell FTX to cryptocurrency exchange Binance back in the company’s early days.

Bankman-Fried stated that he understood he wanted the now-bankrupt exchange to focus on margin trading and provide users with the opportunity to place large bets when he collaborated with FTX co-founder Gary Wang to build it in Hong Kong in 2019.

According to his testimony in court today, Bankman-Fried thought at the time that FTX could become known for serving as a venue that specialized exclusively to margin traders, a niche that wasn’t well-served by exchanges at the time. He stated in his testimony that he anticipated FTX would be of interest to an exchange like as Binance.

According to CoinGecko, Binance is currently the biggest cryptocurrency exchange in the world, with $4.6 billion worth of activity during the previous day.

When FTX collapsed in November of last year, Binance did indicate interest in purchasing the exchange. But the business pulled out of a possible acquisition. “The issues [with FTX] are beyond our control or ability to help,” stated CEO Changpeng Zhao.

Bankman-Fried claimed that while “getting customers” was difficult early on in FTX’s existence, the company eventually became profitable “by word of mouth.” Up to $20 million was brought in by FTX in 2019, according to Bankman-Fried. He said that by 2021, FTX was bringing in $3 million every day.

Bankman-Fried recalled that FTX’s risk engine was one of its early selling features. The risk engine of FTX, which determined when traders’ positions would be liquidated, took a more thorough look at customers’ accounts than those of other exchanges at the time.

The creator of FTX said that during the exchange’s development, he “didn’t write or read” any code. Rather, Bankman-Fried provided guidance on the exchange’s philosophical structure, but Wang was the one who constructed the exchange line by line.

According to Bankman-Freid, one of the primary draws of FTX at the time of its founding was cross-margin trading. In essence, the function let traders use extra margin from one trade to meet margin requirements for later trades, according to Bankman-Fried.

But Binance never bought FTX at an early stage. Furthermore, according to Bankman-Fried’s testimony, Binance’s own staff was employed to advance the development of its own platform.

Lead attorney Mark Cohen questioned Bankman-Fried to explain the company’s unsuccessful exchange token, FTT, and she indicated Binance’s BNB token served as inspiration. In addition, he mentioned that Binance provided FTX with $80 million in BNB as startup money, making it the exchange’s first investor.

November of last year saw FTX file for bankruptcy as a result of a deadly rush of withdrawals following a sharp decline in FTT. The exchange was compelled to acknowledge that it did not have 1:1 reserves of customer assets since it was unable to satiate customers’ overwhelming exit rush.

Even though Bankman-Fried’s company was an early investor in FTX, Binance’s interest was acquired by the company for $2.1 billion in a combination of FTT and other assets. When Binance decided to liquidate its token holdings in November of last year, FTT went into complete meltdown.

Bankman-Fried stated in his statement on Friday that his company wanted to “give accounts benefits if they held it” and share in the profits from the exchange.

As an illustration, FTX launched a weekly initiative to purchase FTT with a fraction of its revenue, thereby decreasing its supply by burning the tokens it acquired—a move that, according to Bankman-Fried, is akin to a publicly traded firm repurchasing its stock.

Author: utdinfo_2ye1ln

Leave a Reply

Your email address will not be published. Required fields are marked *