The world of cryptocurrencies in recent weeks has been a very new word from mystery to a downward slope. While market observers have predicted some trends, which people were able to identify, others were aloof of the market trends that started brewing until they came to the brim.
Popular crypto exchange platform Binance has over the years been a trusted name in the space of cryptocurrency trading, and this has made it grow to be the largest trading platform existing, considering the number of volumes they churn out daily.
In this post, I will be giving information on Binance, FTX, their relationship, and the future of cryptocurrency. Oh! And this platform is provided by The Watchtower Dubai, the leading web solutions company in Dubai.
What is FTX?
FTX is a cryptocurrency trading platform that was built by traders for traders, offering innovative trading solutions that go against popular opinion.
FTX is a Bahamas-based cryptocurrency exchange platform founded in 2019 that, at its peak, had over one million users and was at some point considered the third largest crypto exchange platform by volume. '
What does FTX do?
A cryptocurrency exchange, FTX, encourages trading and the liquidity of coins and tokens.
The platform provides easy access where users can connect their wallets, leverage tokens, swap digital currencies, initiate trades, create derivative contracts, and purchase and sell NFTs with FTX.
The FTX platform offers an extensive range of orders, from basic market orders to more complex trailing stop orders.
What relationship do FTX and Binance have together?
FTX and Binance have shared a unique bond that has seen Binance invest in FTX despite being competitors in the digital trading market. Before their deal went sour, according to Wikipedia, FTX had a misleading reputation as one of the most reputable and stable companies in the cryptocurrency sector.
CoinDesk has provided a story from November 2022, stating that the associated company Alameda Research invested a sizable amount of its assets in FTX's native coin, FTT. In response to this information, the CEO of a competing exchange, Binance, Changpeng Zhao, declared that Binance would divest its shares in FTT.
This action by Binance was followed by a subsequent decline in the price of FTT and an immediate decline in FTX. Binance signed a letter of intent to purchase the company with due diligence to follow amid the impending liquidity crisis at FTX, only to retract its offer the day after.
What happened to FTX?
FTX, which had been valued at $32 billion by private investors, suddenly experienced the crypto equivalent of a bank run, where investors began pulling out funds after citing possible fears that the platform was going under.
It was gathered that the CEO of FTX had allegedly secretly transferred funds of $10 billion to his trading company Alameda Research. It became more worrisome when most of the funds disappeared.
The big blow that led to the resignation of the founder and CEO of FTX, Samuel Bankman-Fried, was when, despite the panic observed in FTX, Binance withdrew its offer to buy the company.
The decision to reverse course was made just one day after Binance CEO Changpeng Zhao revealed that his company and the largest cryptocurrency company in the world had reached a non-binding agreement to purchase FTX's non-U.S. businesses for an undisclosed sum, saving the company from a liquidity crisis.
What is the future of FTX?
For starters, the relationship between FTX and Binance has been terminated, at least for now. People have also mentioned that perhaps Binance’s move was intentional to see its competitor go down the curve.
Zhao, the CEO of Binance, has also instructed his employees to refrain from trading FTT tokens.
Although FTX has filed for bankruptcy under Chapter 11 to protect its assets, this action has had a ripple effect on their sponsorships, including Formula One racing and the like.
Just before the cryptocurrency exchange entered Chapter 11 bankruptcy, Sam Bankman-Fried resigned, and John J. Ray III was named CEO of FTX.
The relationship between FTX and the largest cryptocurrency exchange platform, Binance, has gone sour.
And these have been fueled by the sudden blackout caused by Binance purchasing FTX to save the plummeting rival platform after it was allegedly experiencing some fund mismanagement.
FTX has since filed for bankruptcy under Chapter 11 and has employed the services of John J. Ray III as their new CEO.