Binance Denies Accusation From UK Lawmaker That It Deliberately Sank FTX

The exchange pointed to a CoinDesk article that set off a series of events that led to FTX's bankruptcy filing.

AccessTimeIconNov 16, 2022 at 4:00 p.m. UTC
Updated Nov 16, 2022 at 4:24 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Binance, which is the world's largest cryptocurrency exchange by volume, denied it planned to deliberately sink rival FTX after being questioned by lawmakers in the U.K.

The exchange sent the Parliament's Treasury Committee a five-page document outlining the sequence of events that led to the FTX collapse on Wednesday after promising to do so at a hearing on Monday.

In the document, it said the initial catalyst was a CoinDesk article on how most of Alameda Research's assets consisted of FTT, FTX's own token. Alameda is a trading firm affiliated with FTX. FTX has since filed for bankruptcy.

"It is clear from the above that the causes of the collapse of FTX were the financial irregularities and possible fraud initially reported in the CoinDesk article on 2 November," the document stated.

The Treasury Committee held a hearing on Monday to question officials from crypto companies in the aftermath of FTX's collapse, and Daniel Tinder, Binance's vice president of governmental affairs of Europe, offered to send the document after Member of Parliament Harriett Baldwin, who is chairwoman of the committee, asked if Binance CEO Changpeng Zhao "brought about the collapse of FTX?"

The committee also asked Trinder if Binance knew its actions that included unloading much of its FTT holdings on the market and agreeing to acquire FTX before backing out of a deal could lead to the collapse of FTX.

"But it must have been apparent when that decision was taken that was likely to cause the collapse of FTX, one of your major competitors," Baldwin said.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.