More Shade: Binance CEO Criticizes Use of FTT as Collateral

The dust has yet to settle, and the deal has not yet closed, but Binance’s rapid acquisition of FTX following a liquidity crunch is questioning the entire crypto ecosystem.

Just last week, FTX appeared to be Teflon against any attacks lobbed against the digital asset industry. But following an article in Coindesk that questioned its operations and FTX’s relationship with Alameda – a trading platform owned by FTX CEO Sam Bankman-Fried, things moved quickly and in a bad direction.

A digital run on the bank took place as investors rushed to withdraw funds, compelling Bankman-Fried to ask Binance CEO Chengpeng “CZ” Zhou to bail them out. A “strategic transaction” was quickly signed.

Today, CZ is highlighting “two big lessons” learned from the FTX debacle.

First, don’t use a token you created as collateral – referencing FTX’s native FTT – which has tanked in value. As of this moment, over 70% of its value has been lost.

Second, don’t use capital “efficiently,” alluding to leverage on the books that have undermined FTX’s operations.

In a later Tweet, CZ stated, “Banks run on fractional reserves. Crypto exchanges should not.”

While CZ throwing shade at FTX’s management may involve a bit of schadenfreude, it has been well-earned.


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