The CEO of Binance discusses the implications that the fall of FTX will have on the cryptocurrency industry.
Friday, at a conference in Indonesia, Changpeng Zhao (CZ), the CEO of cryptocurrency exchange Binance, presented his thoughts on the probable influence that the collapse of FTX has on the cryptocurrency business. FTX was a major player in the market. On Friday, FTX submitted its petition for Chapter 11 bankruptcy, and Sam Bankman-Fried resigned from his position as CEO of the company.

The event moderator at the conference drew parallels between the FTX debacle and the global financial catastrophe that occurred in 2008, and Zhao responded by saying, "I think it's certainly an accurate analogy." The CEO of Binance added:

When something of this nature takes place, it has a catastrophic effect on the industry. The faith of a significant number of customers is damaged, and I believe that this will, in the long run, hold us back a few years.

Furthermore, CZ expressed their opinion, saying, "With FTX going down, we will witness cascade repercussions." It is especially likely that those who are closely connected to the FTX ecosystem may suffer adverse effects.

According to Zhao's forecast, the cryptocurrency industry will almost certainly be subjected to increased regulatory scrutiny, with a particular emphasis on capital requirements and the management of deposits. In spite of this, he remarked that it is "probably a good thing, to be honest."

Following the failure of FTX, the White House and various members of Congress in the United States have voiced their support for appropriate cryptocurrency regulation. For instance, Senator Elizabeth Warren (Democrat of Massachusetts) stated that crypto needs "more vigorous enforcement," and she added that she will continue to push the Securities and Exchange Commission (SEC) to "enforce the law."

The possibility of Binance acquiring FTX and acting as a liquidity provider was being considered. However, following the completion of due diligence, the cryptocurrency exchange came to the conclusion that they would not pursue the potential acquisition of FTX.com. They explained their decision as follows: "As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com."

The CEO of Binance is confident that the cryptocurrency business will one day recover, as he expressed his optimism at a conference in Indonesia by saying, "The market will heal itself."