Sam Bankman-Fried Claims Binance CEO Changpeng Zhao Caused FTX Implosion in New ‘Pre-Mortem’ Substack Post
Disgraced FTX founder Sam Bankman-Fried says the head of rival exchange Binance contributed to setting off the demise of his crypto empire.
In a post to Bankman-Fried’s Substack titled “FTX Pre-Mortem Overview,” the 30-year-old says a combination of several factors caused the collapse of the Bahamas-based FTX exchange.
Those factors include the mismanagement of sister trading firm Alameda Research, the crypto bear market and a deliberate move by Binance CEO Changpeng “CZ” Zhao.
“Three things combined together to cause the implosion:
a) Over the course of 2021, Alameda’s balance sheet grew to roughly $100 billion of Net Asset Value, $8 billion of net borrowing (leverage), and $7 billion 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.”
He says Alameda managed to hold up despite the series of crashes in the crypto market but not until Zhao announced on Twitter that Binance will sell $580 million worth of FTX Tokens (FTT).
“Then came CZ’s fateful tweet, following an extremely effective months-long PR campaign against FTX–and the crash.
The November crash was a targeted attack on assets held by Alameda, not a broad market move.”
Bankman-Fried, who is under house arrest following his eight-count indictment last month, also denies that he misappropriated FTX customer funds. He says he is willing to have his personal assets used to pay customers.
“I didn’t steal funds, and I certainly didn’t stash billions away. Nearly all of my assets were and still are utilizable to backstop FTX customers. I have, for instance, 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 [Directors and Officers] legal expense indemnification.”
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The post Sam Bankman-Fried Claims Binance CEO Changpeng Zhao Caused FTX Implosion in New ‘Pre-Mortem’ Substack Post appeared first on The Daily Hodl.
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Author: Rhodilee Jean Dolor
