This last will-they-won’t-they deal between Binance and FTX is in many ways a product of longstanding issues between the two cryptocurrency exchanges. At the heart is a culture conflict between the exchanges and their CEOs.
The two companies began in radically different settings. Per Yahoo Finance, Sam Bankman-Fried began his career as a trader on the conventional market. He founded FTX in 2019, having been inspired by a recent conference. Changpeng Zhao founded Binance two years earlier. Zhao was almost 20 years older than Bankman-Fried, with a considerably longer resume. As Forbes notes, Zhao founded the Fusion Systems high-frequency trading service in 2005, then co-designed blockchain.info, the world’s most popular cryptocurrency wallet (now blockchain.com). He also served as CTO for the OKCoin exchange before making Binance’s initial coin offering in 2017.
In 2019, Binance purchased a sizable chunk of FTX. Per CoinYuppie, FTX’s business at the time was limited to cryptocurrency derivatives, trading in cryptocurrency futures, options, and contracts rather than pushing a token of its own. When Bankman-Fried transitioned FTX to a true crypto exchange with its own token, FTT, he created a competitor for one of his largest investors. In the process, Bankman-Fried rebranded himself as a bit of a crypto evangelist, “crypto’s JP Morgan” (via MarketWatch), rhapsodizing on every accessible platform on his vision of cryptocurrency as a well-regulated part of the conventional financial market.
In many ways, Zhao’s Binance was and is the opposite of Bankman-Fried’s crypto vision. Starting in mainland China (FTX was founded in Hong Kong and relocated to the Bahamas in 2021), Binance was accustomed to tight regulation and the demands of the public sector. Zhao wasn’t interested in Bankman-Fried’s pitch for greater regulation (via Fortune). He’d had his share. The more Bankman-Fried sought attention, the less FTX looked like Zhao’s idea of crypto as a paying proposition.
That by itself was likely enough to trigger digital rivalry, but it didn’t have to. The two most reliable ways to start an argument were about to enter the picture — money and Twitter.