Infamous crypto entrepreneur SBF was trying to attack FTX rival Binance via regulatory action
Caroline Ellison disclosed that FTX co-founder was trying to use regulatory action against Binance crypto exchange, to increase FTX’s share in the crypto market.
FTX crypto exchange was the second top-ranked crypto exchange in the crypto sector by Crypto trade volume, after Binance exchange. FTX exchange’s market share was nearly 10% and that of Binance was nearly 50%. Notably, Binance was one of the investors in the FTX exchange but Binance took its investment back from FTX between 2021 to 2022 citing some conflict of interest between the CEOs of both exchanges.
In Nov 2022, the FTX crypto exchange collapsed badly following a report by the Coindesk media which disclosed the bad financial position of the FTX exchange and FTX’s sister firm Alameda Research. Later investigations found that Sam Bankman-Fried (SBF), the biggest stakeholder in FTX & Alameda, misused the majority of the customer’s funds for personal benefits. On 14 Nov 2022, FTX filed for bankruptcy under the Chapter 11 code in a US bankruptcy court, to save himself from any FTX customer legal action.
Just a day ago, On the second day of Alameda Research’s former CEO Caroline Ellison’s appearance in the court, a handwritten note was presented. That was Ellison’s notes which describe the relationship between FTX & Alameda.
Ellison told jurors that FTX ex-CEO SBF was planning to shut down Alameda Research following the collapse of the Terra (Luna) crypto project and also looking to raise $1 billion from the Saudi Prince, known for his investments in blockchain gaming.
Ellison also disclosed that one year before the Terra project downfall, SBF’s main goal was to hit Binance with regulatory actions, so that FTX could get a better opportunity to increase dominance & market share.
She also said that SBF was willing to raise funds from crypto lending firm BlockFi, which already lent $660 million to Alameda.
Former Alameda CEO admitted that it was able to maintain Alameda’s performance during the crypto winter with better strategy but already Alameda had spent billions from its line of credit with FTX.
By taking this latest statement of Ellison, some people solved a past theory of unofficial two meetings between SBF & US sEC chairman Gary Gensler. People claim that SBF passed some hidden unethical information related to Binance to the SEC chairman, So that the SEC agency can initiate multiple regulatory actions against Binance. However it is only a theory & there are no evidences to prove this theory true but we can consider this theory true, until Gensler will reveal the aim of that meeting officially.
