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Binance Denies Involvement In FTX Crash Following Accusations From Lawmakers

Changpeng Zhao CZ, CEO of Binance, denies all allegations relating to the collapse of FTX after being accused by U.K. lawmakers. CZ outlined the factors that led to the collapse of FTX in a document he submitted during a hearing on Tuesday.

Did Binance Have A Hand In FTX Collapse?

Binance, the largest cryptocurrency exchange by trading volume, was recently accused of being a key player in the collapse of FTX. The lawmakers levelled these allegations against Binance, FTX’s main rival.

Binance responded by sending a document outlining the sequence of events that led to FTX’s meltdown. This outlined document focused on a specific article by Coindesk, which contained information about FTX holding. According to the article, the FTX native token FTT was the most abundant token in the exchange, accounting for the majority of Alameda Research Assets.

It was simple to deduce the true cause of the collapse from this document. The collapse was caused by the misappropriation of funds and misuse of investor funds. This was also reported in a Coindesk article published on November 2nd.

The US Treasury Committee held a hearing, and top crypto firms and organizations were brought in for questioning about the FTX crash.

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Binance Vice President, Daniel Tinder volunteered to send the documents after the committee’s Chairwoman questioned CZ if he was indirectly or directly responsible for FTX’s collapse.

Did FTT Token Liquidation Cause The Crash?

Trinder was questioned about whether Binance knew that liquidating and dumping FTT tokens into the market would result in the company being liquidated and collapsing. As this action was most likely a major factor in the collapse.

Following the FTX crisis prior to the crash, Binance announced its intention to liquidate all FTT holdings on its exchange after Sam Bankman Fried (SBF) was caught collaborating with regulatory officials.

This move by Binance caused the first phase of FTX instability, but SBF assured users that their funds were safe, which proved to be false. Soon, FTX was on the verge of bankruptcy as the finances of its sister company, Alameda Research, began to deteriorate; rumours circulated that FTX used investor funds to manage Alameda Research.

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Binance, on the other hand, came to the rescue on the evening of that day, deciding to buy the exchange, which restored hope to the market until CZ backed out of this deal causing the market to tumble.


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Jimmy Kelly

Jimmy is one of the news journalists for Tokenhell. He is a big crypto enthusiast and bought his first crypto token way back in 2015! Jimmy publishes updates about crypto tokens, events, price analysis and regulation among many other subjects.

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