Binance, the world’s largest crypto exchange by volume, was an early investor in crypto exchange FTX, which 29-year-old Sam Bankman-Fried founded in 2019. This week, the investment relationship suddenly ended. In an extensive interview with Decrypt, Bankman-Fried discussed why.
“We recently repurchased shares from Binance to buy them out of our cap table,” Bankman-Fried said. “I think it just makes sense given the role that our businesses are playing in the space. It can also give us more flexibility going forward.”
On Tuesday, FTX announced a $900 million raise from 60 high-profile investors including Sequoia, Paradigm, Softbank, Paul Tudor Jones, and NFL quarterback Tom Brady and supermodel Gisele Bündchen. It was the largest ever funding round for a crypto exchange, valuing FTX at a cool $18 billion.
Binance, meanwhile, has faced “quite the barrage,” in Bankman-Fried’s words, of warnings from regulators around the world, who have either banned or curtailed its activity .