The FTX Affair continues to occupy the crypto news. If market prices seem to have found a temporary point of stabilization with in particular around 17,000 dollars for Bitcoin, the consequences and responsibilities incurred in the case remain much more vague.
FTX customers, some greatly cheated, are fine sure bitter towards Sam Bankman-Fried (SBF), the founder of the bankrupt exchange, but also accuse Changpeng Zhao (CZ), the CEO of Binance, of taking advantage of the situation, and of not having played his role as promised during this affair.
Sam Bankman-Fried, who under all circumstances, doesn’t seem to lack nerve, sided with these allegations. Since the start of this sordid affair, the two men have not missed an opportunity to rail against each other through the media. So yesterday, December 9, it was via Twitter that the two men decided to exchange their point of view.
Back to the beginnings of the business
In the FTX rout, responsibilities seem to concentrate around SBF and its teams. Indeed, for a very long time, the critical situation of the platform had remained secret from the general public and customers.
The brutal onset of the crisis can be attributed to CZ, the boss of Binance, the largest centralized exchange in the world. On November 6, CZ spoke on Twitter to announce that Binance will liquidate their FTT tokens, native token of its competitor FTX over the following months.
Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs. Onwards.
— CZ 🔶 Binance (@cz_binance) November 6, 2022
The debacle was not long in coming. By contagion effect, users of FTX, and investors who held FTT sold it massively, making fall its price by more than 80% in a few hours.
Very quickly, the exchange, already in bad shape, found itself in dire need of liquidity. At that time, SBF was scrambling to bring new investors into the business by all means, its priority at that time being to save the trading platform, who no longer even had enough to make daily customer withdrawals.
Binance, yet partly executioner of FTX via CZ’s Tweet, was a time positioned to provide assistance to its failing competitor, before retracting. It seems logical. In the shadows, before the affair broke out, SBF was already looking for liquidity, and had already turned to Binance. CZ had requested an audit of FTX’s accounts and, noting the poor management as well as the poor financial results of its competitor, had decided to withdraw from the takeover offer.
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A tumultuous relationship
Today, SBF asserts that CZ attempted to pull off a “hit”, first refusing to help FTX, then coming back into the game once the value of the exchange had crashed, because of his own tweet, pretending to be the savior hero, when he was the responsible (according to SBF) for the bankruptcy of FTX.
This argument, although it may contain some truth, is hard to hear for FTX customers, who are aware that all of this only happened because of FTX’s disastrous management, its suspicious ties to its sister company Alameda, and SBF’s personal abuse. If the point about the eventual rescue of FTX by Binance is real, was that the start of the enmity between SBF and CZ?
Judging by recent exchanges between the two men on Twitter, the battle and the resentment between these two sulphurous personalities would not come from this liquidity crisis of FTX, but would be much older. Binance was indeed a shareholder of FTX, but had withdrawn from the capital of its competitor in the summer of 2021, and the quarrel seems to start from there.
CZ annoys many investors cryptocurrencies par his displayed detachment from the affair, when he was an actor. Some suspect him of being happy with the fall of his competitor. In a recent interview, the boss of Binance said:
We let FTX grow and reach too large a critical size, without questioning ourselves.
Here, SBF, bitter at the statements of his ex-competitor and a tweet from too many CZs, took Twitter by storm to express his displeasure, and try to restore his personal truth.
You threatened to walk at the last minute if we didn’t kick in an extra ~$75m.
We did it anyway because this just made us feel more confident we didn’t want Binance on our cap table.
But again, none of this is necessary. You won. Why are you lying about this now?
— SBF (@SBF_FTX) December 9, 2022
For SBF everything is a story of losing or winning which the individuals following the conversation did not appreciate at all, just like CZ who took the opportunity to reply to SBF that it was not a game and that there was no winner in this affair.
Sam, not that it matters now. You also can’t force us to sell if we don’t want to. Also, we have the veto right to block any further fundraising you were doing. Never used or mentioned it. It was never a competition or fight. No one won. 1/2
— CZ 🔶 Binance (@cz_binance) December 9, 2022
We notice here that CZ takes the height, placing himself once again in the position of the reasonable CEO, who tries to calm the immaturity of SBF. Of course, this whole business is much more complex, but we can only admit that CZ is a master in communication as usual.
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