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Binance Directly Caused the FTX Collapse: Kevin O’Leary

Binance Directly Caused the FTX Collapse Kevin OLeary

At a US Senate committee hearing on December 14, investor Kevin O’Leary criticized Binance for FTX’s collapse. O’Leary, FTX’s hired spokeswoman, revealed discussions with Sam Bankman-Fried in the weeks before bankruptcy.

O’Leary stated that SBF spent over $3 billion to repurchase Binance’s FTX shares over the previous 24 months.

O’Leary answered Senator Pattrick Toomey’s question about FTX’s failure, “Views. No documents “He stated before giving his opinion that FTX and Binance leaders were at odds.

O’Leary said regulation drove the two cryptocurrency exchange leaders’ hidden conflict. Binance and Changpeng “CZ” Zhao had to comply with many regulatory requirements as stockholders of 20% of the FTX.

“Apparently, according to Sam Bankman-Fried, CZ would not comply with regulators’ requests in different jurisdictions to provide the data that would clear them [FTX] for a license […] The only option the management and Sam Bankman-Fried had was to buy him out at an extraordinary valuation close to $32 billion.”

O’Leary claimed that the share purchases impacted FTX’s balance sheet and that Zhao’s decision to liquidate Binance’s holding of the FTX token (FTT) at the beginning of November due to “recent revelations that have come to light” and “post-exit risk management” concerns was done to lower the token’s price.

O’Leary: “In my view, my personal opinion, these two […] in an unregulated market […] with this incredible business in terms of growth were at war with each other, and one put the other out of business, intentionally. Now, maybe there is nothing wrong with that, maybe there is nothing wrong with love and war, but Binance is a massive unregulated global monopoly now, and they put FTX out of business.”

O’Leary also supported cryptocurrency regulation in his speech:

“This nascent industry is culling its herd. Going or gone are the inexperienced or incompetent managers, weak business models and rogue unregulated operators. Hopefully, these highly publicized events will put renewed focus on implementing domestic regulation that has been stalled for years. Other jurisdictions have already implemented such policies and are now attracting both investment capital and highly skilled talent. In the U.S., we are falling behind and losing our leadership position.”

O’Leary earned $15 million as FTX’s paid spokesperson. The crash cost him over $10 million in FTX wallet tokens, reports said.

About MahKa

MahKa loves exploring the decentralized world. She writes about NFTs, the metaverse, Web3 and similar topics.

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