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Binance intentionally put rival crypto exchange FTX out of business, Kevin O’Leary has testified

Kevin O'LearyKevin O’Leary testifies during a hearing before Senate Banking, Housing, and Urban Affairs Committee at Dirksen Senate Office Building December 14, 2022 on Capitol Hill in Washington, DC.

(Photo by Alex Wong/Getty Images)

  • “Shark Tank” investor Kevin O’Leary said Binance intentionally put rival crypto exchange FTX out of business. 
  • FTX was forced to repurchase $3 billion in shares from Binance, he told a US Senate committee Wednesday.
  • The billionaire, who was a spokesman for FTX, has said he lost almost $10 million in FTX’s collapse.

“Shark Tank” investor Kevin O’Leary has blamed Binance for FTX’s collapse, telling lawmakers it drove the rival crypto exchange out of business. 

The billionaire investor, who was paid $15 million to be an FTX spokesman, was speaking at a US Senate hearing Wednesday into the downfall of FTX, which has shaken faith in the stability of companies dealing in crypto assets.

O’Leary said FTX had been forced to spend as much as $3 billion on repurchasing a chunk of its shares from Binance, according to what the exchange’s founder and former CEO Sam Bankman-Fried told him. That stripped FTX’s balance sheet of assets, he testified to the Senate Committee on Banking, Housing & Urban Affairs.

“In my view — my personal opinion — these two behemoths that own the unregulated market together and grow these incredible businesses in terms of growth were at war with each other,” he said. “And one put the other out of business, intentionally.”

“Now, maybe there is nothing wrong with that — maybe there is nothing wrong with love and war. But Binance is a massive unregulated global monopoly now, and they put FTX out of business,” he added. 

The failure of now-bankrupt FTX in November came after the exchange suffered a severe liquidity crisis that sent Bankman-Fried on the hunt for a $8 billion cash injection.

The disgraced former CEO is now in custody in the Bahamas following his arrest on charges of defrauding investors, after reports that FTX secretly transferred billions of dollars in its customers’ funds to sister trading arm Alameda Research.

During the hearing, O’Leary said Binance owned a 20% stake in FTX, which Bankman-Fried was forced to buy back at up to $3 billion, and that helped tip the exchange into collapse.

Bankman-Fried said he had to buy the stake because Binance and its founder Changpeng Zhao, commonly known as “CZ” , were at war over regulatory issues, according to O’Leary.

“Apparently, according to Sam Bankman-Fried, CZ would not comply with regulators’ requests in different jurisdictions to provide the data that would clear them [FTX] for a license,” O’Leary told lawmakers. 

“The only option the management and Sam Bankman-Fried had was to buy him out at an extraordinary valuation close to $32 billion,” he added, saying that’s what drained assets from FTX’s balance sheet.

He also pointed to Zhao’s decision to have Binance sell its holdings of FTX’s FTT token as another factor in the collapse.

O’Leary owned a $1 million equity stake in FTX that has been erased in the company’s bankruptcy, and he has said his personal holding of $9.7 million in crypto tokens on the exchange has been wiped out. He has vowed to find out where his money went and get it back, saying he looks like an “idiot.” 

Read the original article on Business Insider