Binance vs. FTX: CZ calls out ‘bad players’ for crypto exchange jitters
Covered:
CZ raises concerns
CEO of crypto exchange Binance, Changpeng ‘CZ’ Zhao, raised concerns for traders after learning about the infamous phenomenon of trading turmoil on other crypto exchanges.
Shakes in crypto trading relate to a trading event where an investor’s buy or sell order gets stuck and moves down the list, allowing newer trade orders to go through.
Just learned a new word, jitters. On 1 particular exchange, sometimes your orders will get stuck for a while and a few other orders will come before you. Apparently this happens often enough on this exchange that traders coined a term for it, jitters. (Previous)
— CZ Binance (@cz_binance) 19 August 2022
While CZ’s concerns against shakeups weren’t explicitly aimed at any particular exchange, the crypto community on Twitter assumed it was a dig at FTX, a crypto exchange headed by Sam Bankman-Fried. In response to community reaction suggesting “jitters” as a well-known and accepted situation, CZ added:
“All of you knew and said nothing. We have to fight against the bad players.”
CZ further contacted the VIP traders on Binance, who reportedly confirmed that they knew about the illegal trading activities. The indirect allegation against FTX coincides perfectly with the timeline when the Federal Deposit Insurance Corporation (FDIC) issued stop orders to the exchange and four other crypto companies.
According to the FDIC, FTX US, SmartAssets, FDICCrypto, Cryptonews and Cryptosec allegedly misled investors by claiming their products were insured by the FDIC. Reacting to the order, FTX USA President Brett Harrison deleted a tweet making the allegations opposed by the FDIC. However, Crypto Twitter was quick to point out a number of other instances when Harrison falsely claimed FDIC insurance.
— AG123 (@AG123321GA) 19 August 2022
In an effort to dampen the free fall, SBF revealed its intention to work with the FDIC in the future, while reiterating the fact that “FTX US is not FDIC insured.”
In parallel with the above developments, FTX has reportedly started blocking accounts that have been sending cryptocurrencies through zk.money, a private layer-2 chain provided by the Aztec Network on Ethereum.
Recently, FTX froze a user account that was sending coins to @aztecnetwork its zkmoney. According to FTX, Aztec Connect – Aztec network / zk money has been identified as a mixing service, which is a high-risk activity prohibited by FTX.
— Wu Blockchain (@WuBlockchain) 19 August 2022
In response, the SBF supported FTX’s decision to monitor the accounts citing anti-money laundering (AML) compliance. However, he refuted the claims by adding, “but that doesn’t mean any accounts were frozen.”
*This article originally appeared in Cointelegraph.
