Sam Bankman-Fried Realizes His Twitter War With Rival CZ May Have Killed FTX: ‘Not A Good Strategic Move On My Part’
Sam Bankman-Fried, the founder of the collapsed crypto exchange FTX, has many regrets. But the most important among them is the one that may have directly led to the downfall of his company.
While campaigning for favorable crypto regulation in Washington, DC, Bankman-Fried has held private meetings to criticize Changpeng Zhao, the CEO of rival exchange Binance. News of the whisper campaign reached Zhao, who eventually sparked a rush of FTX customers to withdraw their deposits tweet that he would sell his huge holdings in the company’s in-house cryptocurrency FTT.
The criticism “wasn’t a good strategic move on my part,” Mr. Bankman-Fried told the New York Times released on Monday, just days after FTX filed for bankruptcy. “I was quite frustrated with a lot of what I saw, but I should have understood that it wasn’t a good decision on my part to express it.”
Now Bankman-Fried, often referred to by his initials SBF by crypto industry insiders, is at the center of a firestorm over the implosion. Authorities in the Bahamas, where his company is based, and the US are investigating what happened to FTX, which was valued at $32 billion earlier this year, and whether a criminal charge is warranted.
The company’s spectacular disintegration also triggered major aftershocks across the crypto industry, which was already facing turmoil due to the stagnant economy. As soon as problems in Bankman-Fried’s business became known, virtually every cryptocurrency immediately plummeted in value.
Last week, after initiating the run on FTX, Zhao offered to rescue the company by buying it. But after reviewing the books, he withdrew the offer, saying he had identified serious financial problems.
Using the Signal chat app with Bankman-Fried and his representatives, Mr. Zhao simply posted a short message to break the news, according to two people interviewed by the New York Times: “Sam, I’m sorry, but we can’t go ahead with this deal. Far too many problems. Czech.”
Bankman-Fried responded to the refusal by telling employees in a message Times: “I shouldn’t be throwing stones in a glass house, so I’m holding back a bit. Except to say, they probably never really planned on going through with the deal.”
In the few days since the bankruptcy, Bankman-Fried, who lost most of his $16 billion fortune in the collapse, said he’s been taking it relatively well. “You would have thought that I’m not getting any sleep now, and instead I’m getting some,” he said. “It could be worse.”
Additionally, Bankman-Fried said he relaxes while playing the video game picture book brawl– albeit from an unknown location out of fear for his safety.
“It helps me switch off a bit,” he says. “It clears my head.”
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