The crypto world is silently watching the fall of a crypto empire: FTX. This crypto exchange was once known to be the second-best in the world, helping other crypto projects out of the dust. Today, the game turned on them, as they are on the fringe of bankruptcy. Binance might look like the good guy, announcing their potential acquisition of FTX, however the FTT crash says otherwise. Is Binance manipulating FTT? In this article, we go over the entire Binance FTX story.
Binance and FTX: Why did FTT Crash?
It is no secret that businesses tend to compete by racing to get the biggest market share and being the best in the industry. Binance is known to be the biggest crypto exchange, followed by Coinbase and FTX.
News circulated since yesterday about the insolvency of FTX. A slight crash in FTT tokens followed. However, another round of investigation showed that Binance was willingly selling all of its FTT tokens in the market. This move usually results in prices crashing lower, and in a bigger FUD in the market. Consequently, the entire market slipped lower.
Sam Bankman-Fried was not a Good Businessman
Sam was always known to acquire crypto companies that were failing. He did so in order to keep the crypto community safe. Every time a known and big crypto company bankrupt, Sam goes to the rescue and announces his helping hand.
However, a lot of bankrupt companies are not good on your balance sheet. FTX seems to have a lot of illiquid companies, making the company’s cash flow in bad shape.
Binance announced it might acquire FTX
When Binance started selling FTT tokens in the market, news surfaced that this was intentional. Many memes started to appear on twitter, showing the feud between Sam (FTX CEO) and CZ (Binance CEO). The reason behind this analysis is basically to lower the market cap of FTX, thus lowering the price to pay to acquire the company. Apparently, CZ knew about how much FTX was in deep waters.
The rumors turned out to be true. First, Sam from FTX announced that they reached out to Binance and struck a deal with Binance (strategic transaction, to soften the hit on the crypto community).
CZ himself later tweeted about looking into acquiring FTX after they do their due diligence. However, his approach was not as soft as Sam, as he declared that they intend to “acquire FTX”. However, he added that they only signed an LOI (letter of intent, which is non-binding) and that they can still “pull out of the deal at any time”.
Binance under severe HEAT: is Binance the Bad Guy?
Binance is under severe heat recently. The investigative report by Reuters sheds light on the bad practices that Binance has been doing in the shadows. From participating in money laundering to transacting with blacklisted countries…it seems that things are starting to uncover for Binance, mainly for the following reasons.
Forbidden products and Services
Binance created a lot of crypto products that include synthetic assets without any legal ground. Under the Federal Financial Supervisory Authority (BaFin), this activity is illegal. However, the company has a somewhat shady registration which allows it to bypass laws as it pleases.
However, Binance once had tokenized equity offerings, which were suspended after some time on the market.
“Charity” Approach instead of Traditional Marketing
We all love and respect companies that engage in charitable donations. These kinds of giveaways helo companies gain trust and show their solid financial standings. However, it seems that Binance has been doing so for the sake of pure exposure and fame.
Under BaFin laws, it is strictly illegal to market yourself without the approval of BaFin. How to bypass this law? Well, instead of spending money on marketing, spend money on charity!
You might be asking yourself: what’s the bad thing about helping the needy? Well, it’s not that straightforward to prove that the company indeed helped. Binane is a crypto company: Which information relating to those charities is public? Where on the blockchain did we see any charity transactions? What’s their charity wallet?
Dubious Management
It is interesting to see that past Etoro employees are mostly part of the management with Binance. It’s like the company is looking for loopholes in European laws or trying hard to enter this new market. Here are some of the employees:
- Michael Wild
- Doron Rozenberg
- Emir Besirbasic
Investing In Twitter for Free Speech?
It is no secret that Binance was among the backers of Elon Musk when he acquired Twitter. This backing is not only part of a normal investment, but buying into one of the most influential platforms for crypto is definitely a way to get into the heads of millions.
Reuters uncovered illegal transactions
Reuters managed to uncover a list of illegal maneuvers done by Binane to dodge US and UK laws. In their special investigation report, they gave evidence of transactions linked to banned countries, fraud and tax evasion.
Binance FTX Plot: Crush FTX and Buy Cheap?
To sum up, it seems that Binance planned to sell FTT tokens on the open markets to crash FTT prices and FTX’s market share. This paves the way to more dumping in the market, and a lower acquisition price. Binance did not finalize the purchase of FTX yet, just like it took Elon several months to make sure that he got his investment worth. This way, Binance makes sure to eliminate its competitor. Is Coinbase next?
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Source: https://cryptoticker.io/en/binance-ftx-is-binance-manipulating-ftt/