{"id":182774,"date":"2023-10-28T12:38:53","date_gmt":"2023-10-28T07:08:53","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=182774"},"modified":"2023-10-28T12:38:53","modified_gmt":"2023-10-28T07:08:53","slug":"sam-bankman-fried-says-he-wanted-to-sell-ftx-to-binance-since-it-was-founded-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/sam-bankman-fried-says-he-wanted-to-sell-ftx-to-binance-since-it-was-founded-crypto-news\/","title":{"rendered":"Sam Bankman-Fried Says He Wanted to Sell FTX to Binance Since It Was Founded – Crypto News"},"content":{"rendered":"
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During his testimony on Friday, Sam Bankman-Fried told the court that he intended to sell FTX to cryptocurrency exchange Binance when the firm was in its infancy.\u00a0<\/span><\/p>\n

As Bankman-Fried worked with FTX co-founder Gary Wang in 2019 to construct the now-bankrupt exchange in Hong Kong, he said he already knew he wanted it to specialize in margin trading and offer customers the ability to make outsized bets.<\/span><\/p>\n

At the time, according to his court testimony today, Bankman-Fried believed that FTX could establish itself as a venue that catered specifically to margin traders, a specialty that was largely unaddressed across the exchange landscape back then. <\/span>For this reason, he testified that he expected an exchange like Binance could become interested in purchasing FTX.<\/span><\/p>\n

Binance is currently the largest crypto exchange in the world, having seen $4.6 billion worth of volume in the past day, according to CoinGecko.<\/span><\/p>\n

Binance did express interest in buying FTX, as the exchange crumbled last November. However, the company <\/span>backed out<\/span><\/a> of a potential acquisition. As CEO Changpeng Zhao put it, \u201cThe issues [with FTX] are beyond our control or ability to help.\u201d<\/span><\/p>\n

Early on in the life of FTX, Bankman-Fried said \u201cgetting customers\u201d was a challenge, but it spread \u201cby word of mouth\u201d to the point where it became a viable business. FTX saw as much as $20 million worth of revenue in 2019, Bankman-Fried said. By 2021, he said FTX was taking in $3 million in revenue per day.<\/span><\/p>\n

One of FTX\u2019s early selling points was its risk engine, Bankman-Fried recalled. Compared to other exchanges at the time, FTX\u2019s risk engine\u2014which was responsible for deciding when traders\u2019 positions would be liquidated\u2014took a more comprehensive view of customers\u2019 accounts.<\/span><\/p>\n

FTX\u2019s founder said he \u201cdidn\u2019t write or read\u201d the exchange\u2019s code as it was being built. Rather, it was Wang who built the exchange line by line as Bankman-Fried gave input on what the exchange should look like from a philosophical perspective.<\/span><\/p>\n

Bankman-Freid said that cross-margin trading was also part of FTX\u2019s main appeal when it was founded. Essentially, Bankman-Fried said, the feature allowed traders to use excess margin on one trade to satisfy margin requirements on other trades.<\/span><\/p>\n

Binance never made an early acquisition of FTX, however. And Bankman-Fried testified that an internal team at Binance was used, instead, to further develop its own platform.<\/span><\/p>\n

When asked by lead lawyer Mark Cohen to describe FTT, the company\u2019s failed exchange token, Bankman-Fried said Binance\u2019s BNB token was an inspiration. He also noted that Binance was FTX\u2019s first investor, giving the exchange $80 million worth of BNB as seed money, he said.<\/span><\/p>\n

FTX filed for bankruptcy last November after a steep drop in FTT sparked a fatal flurry of withdrawals. As the exchange couldn\u2019t satisfy customers’ rush for the exit en masse, the exchange was forced to admit it did not hold 1:1 reserves of customer assets.<\/span><\/p>\n

While Binance was an early investor in FTX, Bankman-Fried\u2019s company had bought out Binance’s stake through a $2.1 billion mix of FTT and other assets. FTT fell into a tailspin last November when Binance <\/span>moved to sell its holdings<\/span><\/a> of the token.<\/span><\/p>\n

During testimony on Friday, Bankman-Fried said that his company\u2019s goal with FTT was to \u201cgive accounts benefits if they held it\u201d and pass along some of the exchange\u2019s success.<\/span><\/p>\n

For example, FTX had an initiative to use a portion of its income to buy FTT each week, reducing its supply by burning the tokens it acquired\u2014similar to a public company buying back its shares, Bankman-Fried said.<\/span><\/p>\n

Edited by Ryan Ozawa<\/a>.<\/i><\/p>\n

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Stay on top of crypto news, get daily updates in your inbox.<\/h3>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

During his testimony on Friday, Sam Bankman-Fried told the court that he intended to sell FTX to cryptocurrency exchange Binance when the firm was in its infancy.\u00a0 As Bankman-Fried worked with FTX co-founder Gary Wang in 2019 to construct the now-bankrupt exchange in Hong Kong, he said he already knew he wanted it to specialize […]<\/p>\n","protected":false},"author":2,"featured_media":182775,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-182774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/182774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=182774"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/182774\/revisions"}],"predecessor-version":[{"id":182777,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/182774\/revisions\/182777"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/182775"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=182774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=182774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=182774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}