Crypto Mania Exchanges

Sam Bankman-Fried Reveals Longtime Desire to Sell FTX to Binance

Sam Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX, recently revealed his intentions to sell the platform to Binance during its early stages of development.

Trading on the Edge

When Bankman-Fried, alongside his business partner Gary Wang, embarked on this ambitious venture back in 2019, their primary objective was to create an exchange that focused extensively on margin trading, providing customers with the opportunity to place significantly larger bets than what their actual holdings would permit.

Margin trading quickly became a key feature of FTX, as it aimed to cater to a specific market segment that other exchanges were not addressing. SBF believed that by specializing in this area, FTX could establish a strong niche for itself and potentially attract the attention of major players like Binance for a future acquisition.

He testified that the integration of cross-margin trading, a feature that lets traders use excess margin from one trade to cover the requirements of another, was a significant part of FTX’s appeal.

Initial Interest and Subsequent Development

Indeed, Binance did show interest in acquiring FTX when it ran into financial troubles last year. Nonetheless, they eventually decided against it, stating that the issues FTX faced were beyond their capacity to resolve or assist with. 

Bankman-Fried disclosed that despite Binance not pursuing an early acquisition, they played a crucial role in FTX’s initial stages, even providing $80 million worth of BNB tokens as seed money.

Interestingly, FTX later bought out Binance’s stake in the company, a transaction worth over $2 billion, paid in a combination of FTT tokens and other assets. This move came just before FTT’s value plummeted, apparently triggered by Binance’s decision to liquidate its token holdings.

Exploring FTT, the proprietary token of FTX, the alleged criminal openly shared that Binance’s own BNB token played a big role in shaping his ideas. He saw FTT as a method to spread the wealth of the exchange to its users, rewarding them for keeping the token.

Source link