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Key Words: Binance CEO in internal memo: ‘I had very little knowledge of the internal state of things at FTX’

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“‘It was less than 24 hours ago that SBF called me. And before that, I had very little knowledge of the internal state of things at FTX.’”

— Changpeng Zhao, CEO of Binance

Binance CEO Changpeng Zhao on Wednesday made public an outline of rapid-fire events over the past two days that included initial talks about a possible acquisition of rival FTX, but also Binance’s decision to walk away.

In making the internal memo public, Zhao (CZ) addressed rumors that the possible deal to acquire FTX assets had been planned. “One, we did not master plan this,” he stated. “It was less than 24 hours ago that SBF called me. And before that, I had very little knowledge of the internal state of things at FTX.”

In a series of tweets, Zhao also said he was surprised when Sam Bankman Fried (SBF), chief executive of FTX, wanted to talk to him. “My reaction was he wants to do an OTC deal…But here we are.”

The last 24 hours have been chaotic for both the exchanges, as well as cryptocurrency prices. After announcing Tuesday that Binance had signed a letter of intent to acquire FTX, on Wednesday, Zhao said he would no longer move ahead with the deal saying it was a result of “corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations.”

Zhao also said that, “In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”

Bitcoin
BTCUSD,
+0.69%

slumped 15.6% on Wednesday to $15,787.53 as of 5 p.m. Eastern, its lowest level since Nov. 10, 2020, according to Dow Jones Market Data. Ethereum
ETHUSD,
+0.35%

tumbled 17.2% to $11,05.81.

Investors pointed to signs of a spillover from the crypto saga into stocks on Wednesday. The Dow Jones Industrial Average
DJIA,
-1.95%

tumbled 2%, the S&P 500 index
SPX,
-2.08%

closed 2.1% lower and the Nasdaq Composite Index
COMP,
-2.48%

shed 2.5%, according to FactSet.

Read: ‘Is there anything about crypto that is as it seems?’ FTX failure threatens industry’s reputation in D.C.

Capitol Report: ‘Is there anything about crypto that is as it seems?’ FTX failure threatens industry’s reputation in D.C.

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