Infamous FTX founder Sam Bankman-Fried says the head of rival exchange Binance helped end his crypto empire.
In a Bankman-Fried Substack post titled “FTX Pre-Mortem Overview,” the 30-year-old said a combination of factors caused the Bahamas-based FTX exchange to collapse.
These factors include mismanagement of sister trading company Alameda Research, a cryptocurrency bear market and deliberate moves by Binance CEO Changpeng “CZ” Zhao.
“Three things combined to cause implosion:
a) During 2021, Alameda’s balance sheet has grown to approximately $100 billion in net asset value, $8 billion in net debt (leverage) and $7 billion in liquidity on hand.
b) Alameda was unable to adequately hedge its exposure to the market. During 2022, a series of large market crashes (stocks and cryptocurrencies) occurred, reducing the market value of its assets by up to 80%.
c) In November 2022, Alameda became insolvent due to an extreme, rapid and targeted crash caused by the CEO of Binance. ”
He said Alameda managed to hold on despite a series of crashes in the cryptocurrency market, until Zhao announced on Twitter that Binance would sell $580 million worth of FTX tokens (FTT). I say no.
“Then came CZ’s fateful tweet following a highly effective months-long PR campaign against FTX and a 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 eight indictments last month, also denies misappropriating FTX customer funds. I say no.
“I didn’t steal money, I didn’t hide billions of dollars. Nearly all of my assets were available to help FTX customers. I offered to donate or donate 100% of Robinhood’s nearly all of my personal stock to customers if they would respect our D&O. [Directors and Officers] Compensation for legal costs. ”
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