FTX had reportedly reached out to several other large exchanges, including Coinbase and OKX, but was turned down. Its finances were one of the factors after the reviewal of which, Binance backed out of a planned takeover.

While Binance may have averted more scrutiny from regulators in Europe and the United States but the botched deal further aggravated the meltdown in the prices of cryptocurrencies.

The Billionairs’ Feud

Binance and FTX have been at loggerheads long before the two execs engaged in a Twitter spat. The feud dates back to May 2021, when FTX applied for a license in Gibraltar for a subsidiary. To score regulatory approval, it had to provide details about major shareholders, including Binance. However, a Reuters report suggests that Binance dodged several of FTX’s requests for help.

At least 20 such messages and emails were sent by FTX’s lawyers, as reviewed by Reuters, which requested details on CZ’s sources of wealth, banking relationships, and ownership of Binance. The CEO, on the other hand, remained unreachable, which pushed SBF to buy his stake in FTX back.

With Binance no longer in the picture, FTX-owned derivatives exchange ZUBR received approval from the Gibraltar Financial Services Commission (GFSC) as a DLT provider in September last year.

In another leaked chat to the FTX employees, SBF said that he “should not throw stones in a glass house” and argued that CZ probably never had any plans to go through it.

Alameda “Blew Up With 3AC?”

Analysts are now sifting through the finances of FTX, and many believe certain on-chain data show that the exchange may have bailed Alameda out around the same time as Three Arrows Capital (3AC) and other platforms “blew up.”

CoinMetrics’ Lucas Nuzzi, for one, took Twitter to reveal that he might have found evidence of 173 million FTT tokens worth over $4 billion became active on-chain. On closer inspection, he said the large daily moves of the FTT token, which were 40 days old, were found to be “peculiar transactions that interacted with a contract from the FTT ICO.”

“Here’s what I think happened: – Alameda blew up in Q2 along with 3AC+ others. It ONLY survived because it was able to secure funding from FTX using as “collateral” the 172M FTT that was guaranteed to vest 4 months later. Once vested, all tokens were sent back as repayment.”

It must be noted that there is still no conclusive evidence suggesting backing claims that FTX bailed Alameda out, which led to its collapse.