Sam Bankman-Fried Claims Binance CEO Changpeng Zhao Caused FTX Implosion in New ‘Pre-Mortem’ Substack Post

Sam Bankman-Fried Claims Binance CEO Changpeng Zhao Caused FTX Implosion in New ‘Pre-Mortem’ Substack Post

Sam Bankman-Fried, the disgraced founder of FTX, claims that the CEO of the competing exchange Binance was partly to blame for his crypto empire’s demise.

The 30-year-old claims that the demise of the FTX exchange, which is situated in the Bahamas, was brought on by a number of circumstances in a post titled “FTX Pre-Mortem Overview” on Bankman-Substack. Fried’s

These include the cryptocurrency bear market, Alameda Research’s poor management, and deliberate action by Changpeng “CZ” Zhao, CEO of Binance.

Three factors brought on the implosion:

Alameda’s balance sheet rose to almost $100 billion in net asset value by the end of 2021, with $8 billion in net borrowing (leverage) and $7 billion in liquidity.

  1. b) Alameda was unable to cover its market exposure adequately. The market value of its assets fell by 80% in 2022 due to a succession of significant broad market crashes in equities and cryptocurrencies.
  2. c) Alameda became insolvent in November 2022 due to an extraordinary, fast, targeted crash caused by the CEO of Binance.

He claims Alameda survived multiple cryptocurrency market crashes, but only when Zhao tweeted that Binance will sell FTX Tokens for $580 million (FTT).

“Then, after an incredibly successful months-long PR effort against FTX and the crash, came CZ’s tragic tweet.

The November crash wasn’t a general market movement; instead, it was a focused attack on assets held by Alameda.

Bankman-Fried, placed under house arrest after being charged with eight counts last month, also contests that he took money from FTX customers. He claims he is OK with having his assets utilised to compensate clients.

“I didn’t steal money, and I most definitely didn’t hide billions. Nearly all of my resources could be used to support FTX customers. For instance, if the Chapter 11 team would accept my D&O [Directors and Officers] legal expenditure indemnification, I have offered to donate nearly all of my shares in Robinhood to customers.

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