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The crypto world turned upside on Tuesday as the CEO of Binance, Changpeng Zhao (CZ), announced his company has signed a letter of intent to rival FTX. The deal, which comes after CZ feuded openly with FTX’s CEO Sam Bankman-Fried (SBF) over the weekend, marks a shock collapse of a company that many viewed as the future of crypto, and leaves Binance as the undisputed king of the industry.
Rumors of FTX’s potential implosion had been circulating for 48 hours with some fretting that the company would share the infamous fate of Celsius and Voyager—large crypto firms that blew up expectedly in the spring and appeared to raid customer funds in a desperate bid to stay solvent. It appears that won’t be the case as SBF stated that the deal will safeguard customer funds:
These developments appeared to reassure the broader crypto markets as the price of Bitcoin and Ethereum, which had swooned amid the rumors of FTX’s potential collapse, but shot back up on news of the Binance deal. Meanwhile, Binance’s native token BNB has rocketed up nearly 20% with its market cap now exceeding $60 billion.
Reactions on so-called Crypto Twitter—where the industry shares all manner of news and gossip—came in the form of relief, but also displease and admiration for the audacity of Binance’s CEO:
Binance first emerged out of nowhere amidst the 2017 bull run, quickly eclipsing one-time crypto king Coinbase to become the biggest crypto firm in the world. In Binance’s early days, the company seemed to delete in flouting regulators, hop-scotching between countries in order to avoid costly compliance obligations. More recently, Binance has made a concerted effort to make nice with regulators, hiring former high-ranking IRS and Interpol agents, and pledging to heed rules designed to prevent money-laundering and other elicit activity.
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