Despite losing much money, Sam Bankman-Fried stated there was no hostility between FTX and Binance. Changpeng Zhao recently said a crypto company should never use a self-created crypto token as collateral or borrow funds from others to operate.
Sam Bankman-Fried lost most of his fortune due to the sharp drop in the value of FTT, the native token of the FTX exchange. Since he keeps most of his wealth in FTT, the loss directly results from the fall in its price.
The value of FTT dropped by around 83% from USD 20.47 to USD 2.67 in a few hours.
Alameda Research, a quantitative trading firm involved in the problem that caused the cryptocurrency market to panic, also uses the FTT token. That situation led FTX to take some emergency measures, like withdrawal suspensions.
Sam Bankman-Fried Explains What Happened between FTX and Binance
Amid rumors about a dispute between Binance and FTX, Sam Bankman-Fried described the situation to his Twitter followers.
The executive announced that FTX and Binance have agreed to conduct a strategic transaction. He explained his team at FTX worked to eliminate the withdrawal backlog before they completed the deal. Besides, he told his users that the exchange would cover their assets 1:1.
Sam Bankman-Fried stated there was no hostility between FTX and Binance, but many investors, including himself, have lost much money.
The case of Sam Bankman-Fried is an example of the risks associated with investing in the crypto market. That is also a reason why many investors diversify their portfolios.
Changpeng Zhao Discusses Two Lessons from the FTX Crash
Changpeng Zhao, the CEO of Binance, gained high popularity from 2021 to 2022 as one of the ten wealthiest people worldwide. He has said he wants to drive the adoption of crypto assets through offline and online educational programs and meetups.
Zhao recently shared two lessons he learned from the crash of the FTX exchange and the FTT token.
The developer said a crypto company should never use a self-created crypto token as collateral. In addition, he highlighted that a project should not borrow funds from others to run its business.
He also confirmed that the Binance exchange never used its native token, BNB, as collateral, saying they have no debts.
The prices of almost all crypto assets have dropped by 10% on average, except Cardano (ADA) coin and BNB. The rumors about the fight controversy between Binance and FTX are the main reason for that decline.
BNB is trading at around USD 300.11 and has accumulated a 9.8% loss over the last 24 hours. While its daily trading volume is slightly above USD 6.13 billion, its market capitalization is about USD 49.48 billion, according to CoinGecko.
Investors should research BNB or any other cryptocurrency before buying it to know its all-time high, behavior, and possible future price. That will help them make better trading decisions and reduce the risk of losing money. It is a matter of time before seeing where the market will take the native token of Binance.
By Alexander Salazar
