Ex FTX CEO Sam Bankman-Fried in a recent disclosure claimed that Binance CEO Changpeng Zhao “CZ” conducted a months-long effort to bring down FTX.
The former crypto millionaire, while responding to recent allegations, pointed out a November 6 tweet from Zhao as the culmination of an extremely effective months-long PR campaign against FTX.
In the November 6 Tweet, Binance CEO, disclosed that he would be selling off Binance’s holdings of FTX exchange token FTT. He further clarified that the selloff was because he wanted to reduce Binance’s risk and no longer wanted to support people who lobby against other industry players behind their back.
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As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ ? Binance (@cz_binance) November 6, 2022
See what he tweeted;
“As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books.
“We will try to do so in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete.
“Binance always encourages collaboration between industry players. Regarding any speculation as to whether this is a move against a competitor, it is not. Our industry is in it’s nascency and every time a project publicly fails it hurts every user and every platform.
“We typically hold tokens for the long term. And we have held on to this token for this long. We stay transparent with our actions”.
After his tweet, FTT’s price plummeted, triggering a major liquidity crisis at FTX. Just five days later, FTX and its affiliated entities filed for bankruptcy on November 11, 2022.
Binance CEO came out again to disclose that his company never caused the FTX collapse. He said they may have been the last straw that broke the camel’s back, but his tweet was not in anyway to spite the now bankrupt crypto exchange platform.
Three things combined together to cause the implosion:
a) Over the course of 2021, Alameda’s balance sheet grew to roughly $100b of Net Asset Value, $8b of net borrowing (leverage), and $7b of liquidity on hand.
b) Alameda failed to sufficiently hedge its market exposure. Over the course of 2022, a series of large broad market crashes came–in stocks and in crypto–leading to a ~80% decrease in the market value of its assets.
c) In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent.
Recall that before FTX filed for bankruptcy, Binance had announced that it had reached a nonbinding deal to buy FTX for an undisclosed amount, in a bid to rescue the company from a liquidity crisis.
However, Binance backed out of the deal after reviewing the company’s structure and books citing too many challenges. The company said via a tweet “Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of [FTX]”.
CZ again denied that Sam Bankman-Fried was ever a rival, previously calling SBF a “psychopath” for even suggesting such a dynamic existed between the two crypto executives.
Bitcoin has jumped to its highest price in a month Thursday on cooling inflation and after a bankruptcy attorney announced Wednesday that more than $5 billion worth of FTX assets had been located. Another $425 million in crypto is said to be held by the Securities Commission of the Bahamas. Last week, the Justice Department revealed it confiscated — or is planning to seize — banking assets and roughly $450 million worth of Robinhood shares potentially linked to FTX. FTX customers are owed more than $8 billion after the crypto exchange collapsed in November.
FTX founder Sam Bankman-Fried – who is on house arrest – launched “SBF’s Substack” and wrote “I didn’t steal funds” in his first post.
Binance is bucking the “crypto winter” and planning to keep its hiring binge going: Its CEO says it more than doubled staff in 2022, and plans to increase headcount by as much as 30% in 2023. (LinkedIn News)