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” throughout the cellphone name that preceded Binance’s attempt to acquire FTX in November 2022, and that he by no means had any intention of going via 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 Money, 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 evident about the place it unraveled. When Alameda CEO Caroline Ellison publicly provided to purchase Binance’s FTT holdings at $22 every — an try to stabilize the market — Zhao says she made “a fatal mistake.”
“She had just revealed her floor price,” he writes. Professional merchants instantly shorted FTT via that stage. The token fell to $15, then $10, then $5. Within 72 hours, $6 billion had exited FTX.
Zhao additionally discloses the existence of “Exchange Collaboration,” a Signal group arrange by FTX’s Zane Tackett throughout 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 — value $580 million at their peak — had turn out to be “basically worthless,” Zhao writes, echoing the firm’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The aftermath introduced a financial institution run on Binance, with $7 billion withdrawn in a single day on Dec. 14.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.” Within a month, he says, customers had deposited all of it again — and extra.
