FTX Contagion: Will Binance give in to pressure from a market slump?

moneycontrol.com:

Cryptocurrency exchange FTX, once ranked third in the world for trading volume among cryptocurrency exchanges, teetered on the verge of bankruptcy for a few days before founder Sam Bankman-Fried declared it bankrupt.

The fallout of Bankman-Fried’s dubious activities at sibling company Alameda Research, which involved crypto coins taken from FTX’s books, sent shockwaves across the cryptocurrency community.

The incident made it clear that centralised exchanges (CEXs), despite how they present themselves to the crypto community, have unlimited control over the digital assets of their customers while keeping their own business practices a secret.

Also Read | Insurers shun FTX-linked crypto firms as contagion risk mounts

With investor confidence in the crypto ecosystem deteriorating at an alarming rate, the collapse of FTX has set off a domino effect that threatens to bring down even well-established crypto enterprises.

Why not use the other crypto industry mascot?

Before we dismiss the FTX debacle as the result of the founder's excesses, it is important to determine whether the crypto companies doing business with the exchange were complicit in the wrongdoings.

The role of Changpeng Zhao, the founder of Binance, is frequently forgotten even though US Federal prosecutors have opened numerous investigations into FTX to investigate claims of fraud, market manipulation, and other offences.

Only a few days after announcing his company's intention to sell off all of its holdings in FTX's native FTT token, Zhao, or ‘CZ’ as he is known in the cryptocurrency community, said on Twitter that Binance would purchase FTX when the first cracks showed.

If this seemed suspect, then Zhao’s complete U-turn the following day ought to have raised red