Coinbase CEO Reacts To Binance Acquiring FTX, Calls it Risky Business Practices

Author: Sohrab Khawas

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    On Tuesday, i.e., 8th November, Binance announced that it has signed a written agreement to acquire its closest rival, FTX Exchange. 

    The agreement comes in the wake of a weeks-long social media standoff between Binance CEO Changpeng Zhao and FTX founder Sam Bankman-Fried.

    It was noted that FTX was involved in “conflicts of interest involving intricately interlocked companies,” according to a strong declaration made by Brian Armstrong. 

    Coinbase CEO Brian Armstrong began by expressing “sympathy for everyone involved in the present situation with FTX.” Armstrong understood the “challenging” aspect of putting customers’ property in jeopardy. 

    That being said, Coinbase’s CEO clarified for the community that their platform is autonomous from FTX, and Coinbase does not have any “material exposure” to FTX or Alameda Research.

    Armstrong also made a bold assertion by saying, 

    “Risky business activities, such as conflicts of interest between closely related firms and the misuse of client funds (loan user assets), appear to be at the root of this occurrence.” 

    In a now-deleted Twitter conversation, FTX CEO Sam Bankman-Fried said customer assets were safe. After a potential Binance takeover, he stated that FTX had a “backlog” of customer withdrawals that Binance might help clear. 

    Armstrong added that Coinbase is registered and publicly traded in the US “because they believe that transparency and integrity are extremely crucial.” Furthermore, Coinbase is publicly traded and must comply with SEC financial data rules, while FTX is not. 

    Armstrong also opposed additional regulation, which SBF had proposed while allowing the crypto business to “struggle.” 

    Armstrong said Coinbase would “engage with legislators to enact sensible legislation for centralized exchanges,” but he didn’t think there was a “fair playing field” yet.

    Additionally, the CEO of Coinbase lobbied for the expansion of non-custodial options.

    “Decentralized private networks and self-custodial wallets that do not rely on trusted third parties. You may put your faith in the underlying logic and coding, and everything will be open to public scrutiny on the blockchain.”

    Armstrong concluded his “tweetstorm” by linking Coinbase’s transparency strategy and claiming that the cryptocurrency exchange is “the most trusted firm out there.”

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