Binance founder Changpeng Zhao (CZ) said Sam Bankman-Fried asked him for “a few billion dollars casually, like he was asking for a bologna sandwich” during the phone call before Binance’s attempt to acquire FTX in November 2022, and that he never intended to follow through.
“I had no interest in owning FTX. I was also not very interested in helping SBF,” Zhao writes in his memoir. Freedom of moneypublished Tuesday. “But we may need to intervene to protect users and the industry.” He signed the non-binding letter of intent, he says, purely formally: “I was explicit that we were not making any commitments. Our team would just evaluate the numbers and then decide.”
Regarding the collapse itself, Zhao clearly knows where it took place. When Caroline Ellison, CEO of Alameda, publicly offered to buy Binance’s FTT stakes at $22 apiece – in an effort to stabilize the market – Zhao said she made “a fatal mistake.”
“She had just revealed her floor price,” he wrote. Professional traders immediately shorted FTT to this level. The token fell to $15, then $10, then $5. Within 72 hours, $6 billion had left FTX.
Zhao also reveals the existence of the “Exchange Collaboration,” a Signal group created by FTX’s Zane Tackett during the Terra/LUNA collapse earlier that year, which included Zhao, Bankman-Fried, Coinbase’s Brian Armstrong, Kraken’s Jesse Powell and others. The group subsequently attracted the attention of DOJ and SEC investigators. “They were keen to find any possible trace of collusion or market manipulation between exchanges,” Zhao writes. “Of course, nothing like that in this matter.”
On November 9, Binance backed out of the deal. Binance’s own FTT holdings — worth $580 million at their peak — had become “fundamentally worthless,” Zhao writes, echoing the company’s $1.6 billion wipe of LUNA six months earlier.
The aftermath led to a bank run on Binance, with $7 billion withdrawn in a single day on December 14. Zhao says he spent that evening having dinner with friends. “I wasn’t worried,” he wrote. “All user funds were in our reserves.” Within a month, he said, users had deposited everything – and more.
