When asked why Binance opted to become an early investor in FTX, CEO Changpeng Zhao remarked in a recent interview that he does not see other exchanges as competitors.
He believes that the bitcoin market is not yet saturated sufficiently, which means that rival exchanges must work together to expand the market:
I never consider somebody to be a competitor. Everyone, even completely different businesses, becomes my enemy if I have that mindset. But I’m a believer in abundance. Most things in our world, in my opinion, do not have finite resources.
In December 2019, Binance revealed that it has a stake in the FTX exchange. After its hardly noticeable introduction in May 2019, the bustling trading platform, which is now valued at a massive $18 billion, was still in its infancy.
FTX raised $900 million in its most recent fundraising round, which comprised Sequoia Capital, the Paul Tudor Jones family, and SoftBank. Binance, on the other hand, was no longer one of the exchange’s investors, which raised a few concerns.
Zhao told Forbes that canceling the FTX acquisition was just a routine part of the company’s investment cycle, although it’s unclear what went on behind the scenes.
Some speculated that the decision was influenced by the increasing regulatory scrutiny surrounding Binance.