For a brief moment in time, Chengpeng “CZ” Zhou, founder and CEO of Binance, and Sam Bankman-Fried founder of FTX and now disgraced former CEO, appeared to be frenemies. CZ indicated he would bail out FTX as the bank-run type event destroyed all liquidity at the crypto exchange. That was until CZ took a look at FTX’s books and realized there was a hole in the balance sheet even he could not fill. Today, FTX is bankrupt and Binance appears to be fine, but the collateral damage to the crypto industry is profound.
This past week, CZ took to Twitter hammering Bankman-Fried, labeling him a “fraudster” and “unhinged.”
It seems $15m not only changed @kevinolearytv’s mind about crypto, it also made him align with a fraudster. Is he seriously defending SBF?https://t.co/JoKapOcMXr (baseless attacks start around 4:20).
A thread. 1/11
— CZ 🔶 Binance (@cz_binance) December 9, 2022
Casting aspersions at O’Leary, CZ said, unlike the well-known Shark, they continue to do due diligence even after they invest.
“As an early investor in FTX, we became increasingly uncomfortable with Alameda/SBF and initiated the exit process more than 1.5 years ago.”
CZ added:
“Sam was so unhinged when we decided to pull out as an investor that he launched a series of offensive tirades at multiple Binance team members, including threatening to go to “extraordinary lengths to make us pay” – we still have those text messages.”
And:
“You don’t have to be a genius to know something don’t smell right at FTX. They were 1/10th our size, yet outspent us 100/1 on marketing & “partnerships,” fancy parties in the Bahamas, trips across the globe, and mansions for all of their senior staff (and his parents).”
Bankman-Fried did respond, stating, “You won. Why are you lying about this now.”
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
With two Congressional hearings about Bankman-Fried scheduled for next week the saga of the demise of FTX continues.