Binance founder Changpeng Zhao (CZ) says Sam Bankman-Fried requested him for “a couple of billion dollars nonchalantly, as if he were asking for a bologna sandwich” in the course of the cellphone name that preceded Binance’s try to accumulate FTX in November 2022, and that he by no means had any intention of going by means of with it.
“I didn’t have any interest in owning FTX. I also wasn’t that interested in helping SBF,” Zhao writes in his memoir Freedom of Cash, launched Tuesday. “But we may have to step in to protect the users and the industry.” He signed the non-binding Letter of Intent, he says, purely as a formality: “I was explicit that we were not making any commitment. Our team would simply assess the numbers and then decide.”
On the collapse itself, Zhao is obvious about the place it unraveled. When Alameda CEO Caroline Ellison publicly supplied to purchase Binance’s FTT holdings at $22 every — an try and stabilize the market — Zhao says she made “a fatal mistake.”
“She had just revealed her floor price,” he writes. Skilled merchants instantly shorted FTT by means of that stage. The token fell to $15, then $10, then $5. Inside 72 hours, $6 billion had exited FTX.
Zhao additionally discloses the existence of “Exchange Collaboration,” a Sign group arrange by FTX’s Zane Tackett in the course of the Terra/LUNA collapse earlier that 12 months, which included Zhao, Bankman-Fried, Brian Armstrong of Coinbase, Jesse Powell of Kraken and others. The group later attracted scrutiny from DOJ and SEC investigators. “They were keen to find any possible hint of collusion or market manipulation between the exchanges,” Zhao writes. “Of course there was no such thing in this case.”
By Nov. 9, Binance had walked away from the deal. Binance’s personal FTT holdings — price $580 million at their peak — had change into “basically worthless,” Zhao writes, echoing the corporate’s $1.6 billion LUNA wipeout six months earlier.
The aftermath introduced a financial institution run on Binance, with $7 billion withdrawn in a single day on Dec. 14. Zhao says he spent that night at dinner with buddies. “I was not worried,” he writes. “All user funds were in our reserves.” Inside a month, he says, customers had deposited all of it again — and extra.
