‘Do not view it as a ‘win’ for us’: Binance’s CZ says on FTX acquisition News ▸ US ▸ Bankruptcy
‘Do not view it as a ‘win’ for us’: Binance’s CZ says on FTX acquisition
The CEO of Binance confirmed that the announcement of FTX's acquisition was not pre-planned and that he was unaware of the company's internal state.
2 min read
Updated: Oct. 10, 2023 at 10:06 am UTC
Web Summit / CC BY 2.0 / Flickr. Remixed by CryptoSlate
Binance CEO Changpeng Zhao(CZ) shared his views regarding the recent FTX debacle with the Binance community, stating FTX going down is not good for the industry as it will welcome tougher regulations around the globe.
“Do not view it as a “win for us. User confidence is severely shaken. Regulators will scrutinize exchanges even more. Licenses around the globe will be harder to get,” CZ said in the statement.
In response to harder regulations, the CEO said that Binance would “significantly” increase transparency, proof of reserves, insurance funds, and more.
The statement from CZ came after Binance announced acquiring FTX, which led to huge speculation that drove BNB prices but later brought down the whole market amid overall bearish sentiments. Earlier, Binance decided to sell all its FTT reserves which led to a huge withdrawal of assets from the Bahamas-based cryptocurrency exchange.
But, the Binance CEO confirmed that the announcement of the acquisition of FTX that followed was not pre-planned and revealed that he was unaware of the internal state of FTX.
“It was less than 24 hrs ago that SBF called me. And before that, I had very little knowledge of the internal state of things at FTX. I could do some mental calculations with our revenues to guess theirs, but it would never be very accurate,” Zhao said.
Meanwhile, the CEO hinted that he could still walk away from the acquisition deal. However, while the due diligence on the deal is still ongoing, Zhao revealed that he had ordered his exchange, Binance, to stop the sale of FTT and warned others not to buy and sell FTT tokens.
Earlier, Zhao warned actors against borrowing to run a crypto business. CEO believes FTX’s troubles offer lessons to other actors in the industry.
Two big lessons:
1: Never use a token you created as collateral.
2: Don’t borrow if you run a crypto business. Don't use capital "efficiently". Have a large reserve.
Binance has never used BNB for collateral, and we have never taken on debt.
Stay #SAFU.🙏
— CZ 🔶 Binance (@cz_binance) November 8, 2022
Further, in a separate Twitter post, he called on all crypto exchanges to carry out proof-of-reserves to enhance the transparency of user funds.
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Author 
Soumen Datta
Soumen is a dedicated researcher and writer in the field of cryptocurrencies, DeFi, NFTs, and GameFi projects.
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In this article
BNB, or Binance Coin, is a cryptocurrency created by Binance.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Changpeng Zhao, popularly known as “CZ,” is a notable figure in the cryptocurrency world, primarily for founding and leading Binance, the world’s leading cryptocurrency exchange by trading volume.
