![]() This May and June, Bankman-Fried’s trading firm, Alameda Research, suffered a series of losses from deals, according to three people familiar with its operations. That sum was paid to Binance, in part, in FTX’s own coin, FTT, Zhao said last Sunday - a holding he would later order Binance to sell, precipitating the crisis at FTX. ![]() Two months later, with Binance no longer involved, Gibraltar’s regulator granted FTX a license. He bought back Zhao’s stake in FTX for about $2 billion, the person with direct knowledge of the deal said. In June 2021, however, an FTX lawyer told Binance’s chief financial officer that Binance wasn’t “engaging with us properly” and they risked “severely disrupting an important project for us.” A Binance legal officer responded to FTX to say she was trying to get a response from Zhao’s personal assistant, but the requested information was “too general” and they may not provide everything.īy July of that year, Bankman-Fried had tired of waiting. When FTX in May 2021 applied for a license in Gibraltar for a subsidiary, it had to submit information about its major shareholders, but Binance stonewalled FTX’s requests for help, according to messages and emails between the exchanges seen by Reuters.īetween May and July, FTX lawyers and advisors wrote to Binance at least 20 times for details on Zhao’s sources of wealth, banking relationships, and ownership of Binance, the messages show. Within 18 months, however, their relationship had soured.įTX had grown rapidly and Zhao now viewed it as a genuine competitor with global aspirations, former Binance employees said. At the time, Binance said the investment was “aimed to grow the crypto economy together.” Six months after FTX’s launch, Zhao bought 20% of the exchange for about $100 million, a person with direct knowledge of the deal said. Zhao and Bankman-Fried’s relationship began in 2019. ![]() sanctions, part of a series of articles this year by the news agency on the exchange's financial crime compliance. Reuters reported last month that Binance had helped Iranian firms trade $8 billion since 2018 despite U.S. Justice Department is investigating Binance for possible money laundering and criminal sanctions violations. The price of major coins plummeted, with bitcoin slumping to its lowest in almost two years, heaping further pain on a sector whose value has fallen about two-thirds this year as central banks tightened credit.īy ditching the deal, Binance had also avoided the regulatory scrutiny that would likely have accompanied the takeover, which Zhao had flagged as a likelihood in a memo to employees that he posted on Twitter.įinancial regulators around the world have issued warnings about Binance for operating without a license or violating money laundering laws. News of the liquidity crunch at FTX – valued in January at $32 billion with investors including SoftBank and BlackRock – sent reverberations through the crypto world.
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