FTX and its founder Sam Bankman-Fried may have a lot more than money problems in the future.
The US Department of Justice wants Binance to share what is causing the company: run away of the pending deal to acquire FTX, according to a CoinDesk source.
The report claims that authorities in the US have asked for more information about what was discovered by Binance in their due diligence investigation into the failing FTX. Binance is the world’s largest cryptocurrency exchange. The founder, Changpeng Zhao, or CZ for short, announced just two days ago it entered into a non-binding agreement to acquire FTX, the fourth largest global crypto exchange. The deal was conditional on the results of due diligence.
Just a day later, Binance announced it was pulling out of any deal with FTX, claiming that “the issues are beyond our control or our ability to help” FTX and its customers. US and European regulatory and DOJ officials are eager to learn more about the “problems” Binance has found.
Binance’s canceled bailout for FTX comes just days after multiple reports were published questioning liquidity of the crypto empire run by Sam Bankman-Fried, who also goes by SBF. News spread about the possibility of SBF’s trading firm, Alameda Research, being insolvent. Seeing the reports, CZ announced on the weekend that Binance sold its holdings of FTX’s token FTT. Others soon followed, and within 72 hours, $6 billion was withdrawn by FTX customers.
as the Wall Street Journal reported on Thursday, Alameda owes FTX $10 billion in loans that were funded by the deposits of the crypto exchange’s customers.
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FTX founder SBF broke his silence on Thursday morning, blaming his poor math on the problems facing FTX and its clients.
What was not mentioned? The improprieties and potentially illegal practices being carried out that multiple news outlets have now reported on.
And why did Binance pull it out of the deal just hours after looking in FTX’s books? Maybe we’ll find out soon.