Binance Facing Probe for Its Alleged Role in FTX Meltdown
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On Tuesday, the cryptocurrency exchange Binance said that it has agreed to provide the UK Parliament’s Treasury Committee with information regarding the proposed FTX takeover agreement and its decisions to sell its holdings of the FTT coin. The crypto exchange will show up as a witness in the FTX group’s probe into crypto assets.
According to Bloomberg, on November 15, Binance promised to provide proof that its decision to liquidate $580 million worth of FTT tokens did not cause the FTX collapse.
On Monday, MPs interrogated Daniel Trinder, Binance’s vice president of government affairs in Europe, over the choice to liquidate FTX Token, valued at $580 million (FTT). Consequently, evidence about Binance’s decision-making process for selling FTT tokens and the due diligence performed for the potential acquisition of FTX is sought by the Treasury Committee of the UK Parliament.
FTT Trading Volume Soared Following Pullout Statement by Binance
Trading volumes for the token increased to a year high when Binance opted to liquidate FTT tokens amid the disclosures surrounding Alameda Research and FTX. It also initiated a series of events that led to FTX declaring bankruptcy as it began to have a liquidity crisis.
Harriett Baldwin, the chair of the Treasury Committee in the UK Parliament, stated that the committee is looking for documentation, such as internal emails and records, on the market repercussions of Binance’s FTT divestiture.
Trinder added that Binance never intended for rival cryptocurrency exchange FTX to fail; rather, the company just wanted to safeguard its own users. Additionally, he committed to providing proof by November 15. However, for legal and security reasons, Binance may modify some information.
The communication between FTX and Binance during the liquidity crisis will show whether Binance was aware that it would have an effect on the cryptocurrency market.
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