Sam Bankman-Fried’s Testimony
In his testimony before the US court, Sam Bankman-Fried admitted to making mistakes but denied defrauding US customers. He also revealed that FTX was open to selling itself to Binance during its early days.
The Vision behind FTX
When Bankman-Fried co-founded FTX in 2019 with Gary Wang, he had a clear vision for the exchange. He wanted to focus on margin trading and provide customers with the opportunity to place large bets.
According to Bankman-Fried’s testimony, FTX believed that it should establish itself as a specialized venue for margin trading. This was an area that few other market players were addressing at the time. He mentioned that Binance would have been interested in acquiring FTX due to its focus on margin trading.
One of FTX’s distinguishing features was its advanced risk engine, which took a holistic approach to determining when traders’ positions would face liquidation. Additionally, cross-margin trading played a significant role in FTX’s early appeal, allowing traders to utilize surplus margin from one trade for other trades.
Binance’s Interest and Withdrawal
Binance did express interest in acquiring FTX when the exchange faced difficulties in November last year. However, Binance eventually backed out of the potential acquisition, citing issues beyond their control or ability to help.
Instead of acquiring FTX, Bankman-Fried testified that Binance used an internal team to enhance its own platform. He also mentioned that Binance had been FTX’s inaugural investor, providing $80 million worth of BNB as seed funding.
Hot Take: FTX’s Early Days and Potential Acquisition by Binance
During his testimony, Sam Bankman-Fried shed light on FTX’s early days and its focus on margin trading. He revealed that Binance had expressed interest in acquiring FTX but eventually withdrew from the potential deal. This testimony provides insights into the dynamics of the crypto market and the relationships between major players in the industry.
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