Did Binance knowingly sell FTT and trigger a market crash that wiped out billions?

Binance, along with other entities of the crypto space, were called upon to testify before UK Parliament’s Treasury Committee. This was conducted by the authorities to get a clearer understanding of Binance’s intention and involvement in the recent market crash which bankrupted FTX.

Binance to provide evidence

Binance’s Vice President of government affairs in Europe, Daniel Trinder, in a statement to Bloomberg, confirmed that the crypto exchange would be providing the information demanded by the authorities. This information includes internal correspondence as well as records concerning the sudden sale of Binance’s FTT holdings.

As part of the inquiry, the Treasury Committee will also be looking into the evidence provided by the exchange regarding FTX’s potential acquisition.

This is crucial in understanding whether Binance had any malicious intention behind its decision to sell off its FTT holdings. Since the announcement of the sale led to the crypto market imploding, the onus would fall on Binance to prove they did not cause the crash. Days later, FTX also filed for bankruptcy as the exchange was left with just $900 million in liquid assets against liabilities worth $9 billion.

Binance was also initially planning on rescuing FTX by acquiring it, but less than 24 hours after the announcement, it pulled the plug on the plan. This led to a further deterioration in FTT’s value, racking up losses for the exchange. Addressing the overall condition of the market post-Binance’s decision, the Chair of the committee, Harriett Baldwin, said,

“You’ve got to admit that you were a player in that sequence of events.” 

Trinder replied, stating Binance’s move was born out of the intention of protecting its users first, and this was the main reason behind terminating the deal. However, Binance is still attempting to fix the condition of the market in its own way.

As reported by FXStreet on November 14, Binance’s CEO ChangPeng Zhao (CZ) announced an “Industry Recovery Fund”. This fund is intended to be used to rescue fundamentally strong projects in a liquidity crisis. Supporting the same exchange, OKX also announced a $100 million support fund.

Regardless, once the evidence submitted by Binance becomes public, the world would be able to find out just exactly how innocent Binance was in this entire ordeal.