Binance’s Thumping of FTX Shows How Centralized Crypto Can Be
Changpeng Zhao won’t be rescuing Sam Bankman-Fried’s failed exchange after all, but he’s still the most powerful middleman in crypto.
Changpeng Zhao
Photographer: Zed Jameson/Bloomberg
When then-billionaire Sam Bankman-Fried announced on Twitter that his FTX.com exchange was about to be gobbled up by rival Binance, he tried to reassure everyone with a standard bit of crypto cliché: The buyer was committed to a “decentralized global economy.” Crypto people like decentralization. Never mind that Binance had backed FTX in a corner, saying it would dump its huge holdings of an FTX-issued token, triggering withdrawals and sending FTX into a tailspin so it needed to be saved.
By Wednesday evening Binance announced it’s walking away from the deal to acquire FTX after balking at a gap between liabilities and assets at FTX that could be in the billions of dollars. The crisis around FTX slammed crypto assets, with Bitcoin off 24% over two days and Ether down 29%.