Shark Tank’s Kevin O’Leary Blames Binance for the FTX Downfall

15. Dec 2022 Posted by Akolkar B on News

The dramatic collapse of crypto exchange FTX last month has sent shockwaves all across the crypto market as investigators are now investigating what led to the dramatic collapse of a $32 billion exchange.

On Wednesday, December 14, during the recent hearing on FTX’s failure by the U.S. senate panel, Shark Tank investor Kevin O’Leary proposed a hypothesis with a bias towards FTX.

Not to forget, O’Leary was the mouthpiece of FTX and had invested $15 million in the crypto exchange. During the testimony on Wednesday, Sen. Pat Toomey asked the Shark Tank investor on what caused the collapse of FTX. Responding to it, O’Leary said that FTX and Binance “were at war with each other and one intentionally put the other out of business”.

The implosion in crypto exchange FTX happened when Binance chief Changpeng Zhao stated that they would sell all of their FTX token (FTT) holdings in the open market. This led to major liquidations on FTX and the revelation of a major hole in the exchange’s balance sheet.

Previously, Bhinance chief Chanpeng Zhao had criticized O’Leary’s tendency to protect Bankman-Fried. CZ said that O’Leary was “aligning with a fraudster” because of $15 million.

Additionally, O’Leary said that he also questioned Sam Bankman-Fried over the usage of customer funds over the last two years. SBF informed him that FTX used $3 billion in the repurchase of Binance-owned FTX shares.

The Star Tank investor has asked for stronger regulation today adding that FTX-owned derivatives trading platform LedgerX was the “only entity that didn’t go to zero”. This was because its was regulated by the U.S. Commodity Futures Trading Commission.

Crypto-friendly Sen. Cynthia Lummis also added to the rune on the matter of regulation stating it was time to “separate digital assets from corrupt organizations”. She further added: “FTX is good old fashioned fraud. Mismanagement, failure of people, inadequate controls is what’s on trial. We need to regulate this business and lay digital assets on top of our existing financial framework.”

Earlier this week, FTX CEO Sam Bankman-Fried was arrested in The Bahamas and he U.S. Fed has requested his extradition to the home country. The collapse of FTX has put a major pressure on the entire crypto market.