Communications of the ACM
Binance Pulls Out of Deal to Acquire Rival Crypto Exchange FTX
Sam Bankman-Fried, the head of FTX, was seen as one of the most reliable leaders of the crypto industry.
Credit: Lam Yik Fei/The New York Times
It was a stunning fall for a celebrated executive who was leading the crypto industry's charge into the mainstream of finance.
Over the last two years, Sam Bankman-Fried, a 30-year-old entrepreneur, built a crypto exchange called FTX into a $32 billion company. He spent hundreds of millions of dollars to prop up struggling crypto firms. And he became a major political donor to Joseph R. Biden Jr.'s presidential campaign as well as a frequent, welcome presence in the halls of Congress.
Then, in a matter of days, it was suddenly Mr. Bankman-Fried who needed a bailout, thanks in large part to Twitter posts from a rival that questioned the stability of FTX's business. The tweets sparked what was essentially a three-day bank run of an estimated $6 billion that sent FTX into crisis.
The rival, Changpeng Zhao, the chief executive of a bigger crypto exchange called Binance, agreed to bail out FTX. But FTX's future grew murkier on Wednesday when Binance abruptly said the deal was off. Without much explanation, the company said in a statement that its executives changed their minds because of regulatory concerns and issues with "corporate due diligence."
From The New York Times
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