Binance CEO Changpeng Zhao compared FTX’s collapse to the 2008 financial crisis. I think basically it takes us back a few years.”
Binance CEO Discusses Impact of FTX Collapse on Crypto Industry
CEO of cryptocurrency exchange Binance, Changpeng Zhao (CZ), shared his thoughts on the potential impact that the collapse of FTX is having on the crypto industry on Friday during a conference in Indonesia. FTX filed for Chapter 11 bankruptcy on Friday; Sam Bankman-Fried also stepped down as the company’s CEO.
When the conference moderator compared the FTX fiasco to the 2008 financial crisis, Zhao commented, “I think that’s probably an exact analogy.” The head of Binance added:
With this type of event happening, it’s devastating for the industry. A lot of consumer confidence is shaken, and I think that sets us back a few years.
Additionally, CZ said, “As FTX goes down, we will see cascading effects. Especially for those who are close to the FTX ecosystem, they will be negatively affected.
Zhao expects the crypto industry to face more regulatory scrutiny focused on capital requirements and deposit management. However, he noted that it’s “probably a good thing, to be honest.”
Following the collapse of FTX, the White House and several US lawmakers called for proper regulation of cryptocurrencies. Senator Elizabeth Warren (D-MA), for example, said crypto needed “more aggressive enforcement,” adding that she would continue to push the Securities and Exchange Commission (SEC) to “enforce the law “.
Binance was planning to acquire FTX and provide liquidity. However, after performing due diligence, the crypto exchange decided not to proceed with the acquisition, stating: we will not be pursuing the potential acquisition of http://FTX.com.
The Binance boss believes the crypto industry will eventually rebound, stressing at the conference in Indonesia: “The market will heal itself.”
Zhao also tweeted on Sunday:
It may take some effort, but what else do we need to do? Let’s rebuild.
What do you think of Binance CEO Changpeng Zhao’s comments? Let us know in the comments section below.
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