Sam Bankman-Fried accused Binance boss Changpeng “CZ” Zhao of waging a lengthy campaign to destroy his crypto empire on Thursday while making yet another attempt to explain what led to FTX’s catastrophic bankruptcy.
In a lengthy Substack post, the disgraced former FTX CEO alleged that Zhao’s “fateful tweet” on Nov. 6 capped an “extremely effective months-long PR campaign against FTX.”
“In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,” Bankman-Fried wrote.
The disgraced FTX founder’s business collapsed shortly after Zhao tweeted that Binance was dumping its position on FTX’s in-house digital token FTT.
The tweet started a domino effect that pushed Bankman-Fried’s crypto hedge fund Alameda Research into insolvency and FTX filed for bankruptcy on Nov. 11.
The Post has reached out to Binance for further comment.
The blog post marked some of Bankman-Fried’s first public comments since he pleaded not guilty to eight federal charges of fraud in connection to FTX’s collapse on Jan. 3. The feds have accused the 30-year-old of perpetuating a scheme to bilk FTX customers out of billions of dollars that were used to fund his ritzy lifestyle and prop up risky bets at Almeda.
Bankman-Fried and Zhao have regularly exchanged insults since FTX’s downfall. In December, Zhao responded directly to claims that his actions caused the bankruptcy, tweeting that “FTX killed themselves (and their users) because they stole billions of dollars in user funds.”
“No healthy business can be destroyed by a tweet,” Zhao added.
Bankman-Fried cycled through many of his other oft-repeated defenses in the post and maintained his innocence on the fraud charges. The former FTX boss, who has claimed to be down to his last $100,000, also denied having a secret stash of money.
“I didn’t steal funds, and I certainly didn’t stash billions away,” Bankman-Fried said. “Nearly all of my assets were and still are utilizable to backstop FTX customers.”
Bankman-Fried has been in a separate legal battle in bankruptcy court with the feds and multiple creditors over a $460 million stake in Robinhood. Bankman-Fried’s lawyers have argued he should retain control of the stake to fund his legal defense.
“[I have] offered to contribute nearly all of my personal shares in Robinhood to customers — or 100%, if the Chapter 11 team would honor my D&O legal expense indemnification,” he wrote.
Bankman-Fried’s post included several charts detailing his “estimates” of the financial situations at FTX and Alameda. He claimed that Alameda had a net asset value of $100 billion as recently as 2021.
“All of which is to say: no funds were stolen,” Bankman-Fried wrote. “Alameda lost money due to a market crash it was not adequately hedged for.”
Bankman-Fried is under house arrest at his parents’ home in California. He faces up to 115 years in prison if convicted on all charges.
Several former FTX and Alameda executives, including Caroline Ellison and Gary Wang, are cooperating with authorities on their case against Bankman-Fried.
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