Binance Mulls FTX White Knight Role – What’s Next?
Binance’s U.S. division is reportedly preparing a bid for distressed crypto firms Voyager Digital, Genesis’ loan assets in response to FTX’s collapse.
Key TakeawaysBinance is reportedly interested in acquiring Voyager Digital as well as Genesis’ loan assets, as the FTX crisis persists.
FTX tried to be the white knight of the industry this summer, but it went bankrupt last week thanks to a bank run initiated by Binance CEO Changpeng Zhao.
Although the FTX saga has left thousands of victims, who may never be able to recoup their money, CZ has stated that he believes the industry can move on from the incident.
Share this article Binance’s Rescue Plan Reveals the Truth About the Bank Run That triggered FTX’s collapse last week, “CZ”, the CEO of Binance, seems determined to be the white knight for the crypto market. CoinDesk reported that Binance’s U.S. division is looking to relaunch a bid for bankrupt lending firm Voyager Digital. Changpeng Zhao, the industry leader, had previously placed a bid in September but lost to FTX. Voyager stated that bidding was reopened after FTX filed for Chapter 11 bankruptcy. Wave Financial is reportedly bidding alongside Binance.US after losing out to FTX at the previous auction. Blockworks reported Wednesday that Zhao expressed interest in purchasing the Genesis loan assets. Genesis Trading, the lending arm of Genesis Global Capital, announced Wednesday that it had temporarily stopped redemptions. This was a further blow to the already-crippled cryptocurrency industry. Digital Currency Group owns Genesis, which is the industry’s largest lender. Due to the firm’s extensive activities with other major players in the sector, fears of contagion have been spreading through the industry since yesterday’s announcement. Three Arrows Capital, which took a nine-figure loss on Terra’s downfall, also hit Genesis. Court filings revealed that Genesis had loaned $2.4 Billion to the now-defunct hedge-fund. In an ongoing case, it is seeking $1.2 billion from Three Arrows. Binance’s reported attempts to be the white knight in the industry are ironic considering FTX’s and Sam Bankman Fried’s efforts to take the same role in the Three Arrows liquidity crisis. FTX swooped to acquire Voyager, BlockFi and another company that is reportedly in bankruptcy because of the latest crisis in the industry. Three Arrows went bankrupt and a number of lenders collapsed. The Path ForwardSam Bankman-Fried, former CEO of FTX, said that his company could provide up to $2 billion for other firms. He also famously stated to Forbes that he believed that many other crypto firms would be “secretly insolvent” after the June dominoes fell in June. However, Zhao expressed confidence in a brighter tomorrow on multiple occasions in the past few days. He confirmed Monday that Vitalik Buterin, the creator of Ethereum, was working on a “proof–of-reserves” protocol for crypto entities. Binance will be the first tester. In an interview with CNBC’s Squawk Box, he said that the FTX implosion would “set us back a bit”, but then the industry would become healthier. Binance was set to act as the first tester. FTX had 3 to 5% global market share up until last week. Most of its trading volume came from wealthy institutional investors. “[3-5% is] still a decent amount, quite a few users got hurt. He said that it wasn’t 50% or something similar. Galois Capital, Multicoin Capital and Ikigai were among the top industry funds to reveal that significant parts of their portfolios were trapped on FTX. It is widely believed that other funds or projects may be suffering in silence. The FTX collapse was compared to the 2014 Mt. Gox, which was once the most popular crypto exchange and accounted for 70% of Bitcoin transactions before its fatal hack, is now being compared to the 2014 Mt. After years of delays and a long court battle, those who lost their funds in the disaster are still waiting to be compensated. It is possible that FTX victims will face a similar wait for their assets, if any compensation is received. The funds are effectively gone because FTX reportedly lent almost $10 billion worth client deposits to Bankman-Fried’s Alameda Research, as the trading firm dealt its own losses after Terra’s collapse. FTX users who couldn’t escape in time during the bank run last week are now facing dire consequences. Disclosure: The author of this article owned ETH and other crypto assets at the time of writing. Share this article. 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