Coinbase FTX.US takeover: COIN CEO Armstrong says ‘that would not make sense’
Brian Armstrong, CEO of Coinbase, the largest cryptocurrency exchange in the US, has made it clear that his company will not be attempting to buy FTX.US – the North American affiliate of the cryptocurrency derivatives exchange FTX.
On 8 November 2022, Binance, the world’s largest cryptocurrency exchange by trading volume, announced it was buying FTX after reaching a bailout deal with the embattled crypto company.
Changpeng Zhao, founder and CEO of Binance, said that FTX had asked it for help due to “a significant liquidity crunch”.
Zhao stated Binance will fully acquire FTX, but not FTX.US. Separately, Sam Bankman-Fried, CEO of FTX, stressed that FTX.US is a separate company and should not be impacted by this deal.
However, Zhao did add that as part of the deal Binance had the “discretion to pull out from the deal at any time”.
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Coinbase does not engage in ‘risky behaviours’
Armstrong told Bloomberg that the liquidity crunch that led to the FTX bailout plan with Binance would never happen to Coinbase as it does not engage in “risky behaviours”.
Armstrong added: “We’re not investing customer funds. We’re not doing market making or engaged in any kind of complex arrangement with other parties that we own.”
The Coinbase CEO said regarding the possibility of buying FTX.US “there’s reasons why that would not make sense”.
However, he said presently he is not “at liberty to share the details right now” and will let other people reveal the information “if and when they are ready”. He added that he felt all the information “will come out eventually”.
Armstrong did reveal that he has had a “number of conversations with people over the last 24 hours” about FTX.US following the Binance deal.
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"There's a reason why that would not make sense," says Brian Armstrong, CEO of Coinbase, on passing on buying FTX US.
— Bloomberg Markets (@markets) November 9, 2022
His reaction comes after news broke that Sam Bankman-Fried’s https://t.co/BMo9iSgiat would be taken over by Changpeng “CZ” Zhao’s Binance https://t.co/ymNNeTHhWc pic.twitter.com/h3mavhL5mu
Regulation
As Bankman-Fried played an active role in lobbying for regulation in the US, Armstrong said: “There’s probably a lot of people in [Washington] DC right now kind of scratching their head.”
Additionally, he hoped that this event does not “taint” regulators perception of the crypto industry.
‘A huge thank you to Zhao’
The FTX CEO said via Twitter that the “strategic transaction” would help “clear out liquidity crunches”, and he offered “a huge thank you to Zhao”. Bankman-Fried went to explain that all “assets will be covered 1:1” and that is one of the main reasons why help was sought from Binance.
Bankman-Fried also tried to calm down the crypto market and added “the important thing is that customers are protected”. He went on to say that it may take time to settle and he wished to “apologise for that”.
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