September 22, 2023

Westside People

Complete News World

FTX’s Sam Bankman-Fried Fall Puts Crypto Industry on Edge

FTX's Sam Bankman-Fried Fall Puts Crypto Industry on Edge

Crypto exchange Binance has pulled out of a deal to save rival FTX, a blow to investors who had hoped the agreement would help them recover funds after the collapse of FTX this week.

Binance said in a statement that appeared on Wednesday that its decision was “the result of corporate due diligence.”

The collapse of the deal could jeopardize billions of dollars in FTX, a stunning implosion for a company that just days ago was considered one of the most stable corners of the unbridled world of cryptocurrency investments.

It also marks a rollback on the good fortune of FTX CEO, Sam Bankman-Fried. Over the past two years, the 30-year-old entrepreneur has earned a reputation as one of the smartest and most trusted personalities in crypto.

He built FTX into a $32 billion company. He has spent hundreds of millions of dollars supporting other struggling crypto companies. He became a major political donor to Joseph R. Biden Jr.’s presidential campaign as well as a frequent and welcome presence in the halls of Congress.

Then, within days, it was Mr. Bankman Fried who needed the rescue plan.

The collapse of his young empire was a huge blow to the credibility of the cryptocurrency market. On Tuesday, Fred Bankman said he plans to suddenly sell his troubled company to Binance, a fierce competitor. But Binance, without providing details, said concerns about reports of “mismanagement of client funds” and unconfirmed investigations by US regulators led it to back out of the deal.

“Every time a major player in an industry fails, retail consumers will suffer,” Binance said in its statement. “We have seen over the past several years that the cryptocurrency ecosystem has become more resilient, and in due course we believe that outliers abusing user funds will be eliminated through the free market.”

See also  Twitter is saving at least 50% in relentless cost cuts, The Information reports

FTX declined to comment on Binance’s withdrawal from the deal.

This is an evolving story. Check back for updates.