Binance vs. FTX is a “war of the exchanges”

Marius Ciubotariu, core contributor to Solana-based Hubble Protocol and Kamino Finance says:


“The official line from Binance and CZ in its current all-out attack on FTX is risk management. That the balance sheet of its sister company Alameda – including its large holding in FTT and the FTT collateralized loans on its books – makes FTX high-risk. However, this is much more likely to be about differing positions with regulators and an old-fashioned competition war.

Binance perhaps saw an opportunity to get an edge on a competitor – one that is potentially more favoured by US regulators – and took it. Unfortunately, it may never be possible to tell who is in the right because, simply by taking this action, Binance has an enormous influence on the outcome for FTX.


Binance was once a large investor in FTX but exited a few years ago in return for FTT and cash. They have not been the best of friends since. It is possible that CZ is also threatened by Sam Bankman Fried’s courting of US regulators and politicians.


However, CZ is an astute businessman running the world’s largest cryptocurrency exchange by volume. He is far more motivated by business objectives and competition than politics.

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Binance may possibly see FTX as holding a more favourable position with US regulators and politicians, but the US is one market in an increasingly global cryptocurrency landscape that CZ has the lion’s share of. It’s much more likely to be a war between two big exchanges than anything else.


FTX and Sam Bankman Fried also find themselves on the wrong side of opinion in some debates in the cryptocurrency world right now, particularly among those who believe that regulators are coming too close and that decentralisation should be favoured over centralisation.

As such, the news that their balance sheet is skewed toward their own assets was maybe an opportunity that CZ and Binance couldn’t resist.


Perhaps more important right now is what this billionaire spat could mean for the rest of the cryptocurrency industry.

Solana’s SOL token is currently taking one of the biggest hits because FTX is a big supporter of the layer 1 blockchain and holds significant amount of SOL on its balance sheet that it may have to sell to shore itself up in the current bank run. If that happens, that could be bad news for the SOL token and possibly the industry at large.”