Binance CEO Likens FTX Fiasco to the 2008 Financial Crisis – Warns of ‘Casual Effects’ – Bitcoin Economics News

Binance CEO Changpeng Zhao compared the collapse of FTX to the 2008 financial crisis. He emphasized his warning of “ripple effects”: “It has shaken a lot of consumer confidence, and I think it takes us back a few years.”

Binance CEO Discusses Impact of FTX Collapse on Crypto Industry

The CEO of crypto exchange Binance, Changpeng Zhao (CZ), shared his thoughts on the potential impact of the FTX crash on the crypto industry on Friday at a conference in Indonesia. FTX on Friday filed for Chapter 11 bankruptcy; Sam Bankman-Fried also resigned from his position as CEO of the company.

When the mediator at the conference compared the failure of FTX to the 2008 financial crisis, Zhao commented, “I think that’s probably an accurate analogy.” The head of Binance added:

With this kind of event happening, it is devastating to the industry. A lot of consumer confidence has been shaken, and I think it takes us back a few years.

In addition, Czechoslovakia said: “As FTX decreases, we will see ripple effects. Especially for those who are close to the FTX ecosystem, they will be negatively affected.”

Zhao predicts that the cryptocurrency industry will likely face more regulatory scrutiny with an emphasis on capital requirements and deposit handling. However, he noted, “it might be too good to be true.”

After the collapse of FTX, the White House and several US lawmakers called for proper regulation of cryptocurrency. For example, Senator Elizabeth Warren (D-MA) said crypto needs “more robust enforcement,” adding that it will continue to push the Securities and Exchange Commission (SEC) to “law enforcement.”

Binance was considering acquiring FTX and providing liquidity. However, after conducting the due diligence, the cryptocurrency exchange decided not to proceed with the acquisition, saying, “As a result of corporate due diligence, as well as the latest news reports regarding mishandled client funds and investigations of alleged US agencies, we have decided that we will not pursue the potential acquisition.” on http://FTX.com”.

The head of Binance believes that the cryptocurrency industry will eventually make a comeback, assuring the conference in Indonesia: “The market will heal itself.”

As Zhao tweeted on Sunday:

It may take some effort, but what else do we need to do? Let’s rebuild.

What do you think of the comments made by Binance CEO Changpeng Zhao? Let us know in the comments section below.

Kevin Helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been a missionary ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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