Binance CEO CZ calls disgraced FTX founder Bankman-Fried a “psychopath” over pervasive threat
Binance CEO Changpeng Zhao has accused disgraced crypto entrepreneur Sam Bankman-Fried of being a dangerous lunatic for threatening to leak information that could harm the billionaire exchange’s co-founder known as CZ.
“Only a psychopath could write that tweet,” Zhao responded to a question from a moderator at an investment summit sponsored by the Milken Institute on Thursday.
CZ alluded to a Post by Bankman Fried that he “might have more to say about a particular sparring partner.”
Zhao previously said he suspected Bankman-Fried’s collapsed empire was responsible for leaks that put his children at risk, telling the industry on Monday he had evidence pointing to FTX as the source.
Whether by default or by design, Binance has emerged from the collapse of FTX as the most powerful player in the crypto ecosystem – one capable of sinking a powerful rival in a matter of days. The FTX collapse has wiped out all of Bankman-Fried’s fortune and he faces a possible prison sentence.
The fallout has sparked contagion across the industry and triggered a liquidity crunch at the crypto lender Genesis Global Capitala unit of Barry Silbert’s Digital Currency Group.
This in turn has caused problems for Gemini Earn, an earnings service offered by billionaire twins Tyler and Cameron Winklevoss, who had partnered with Genesis.
Now, Binance’s separately managed U.S. unit is reportedly considering acquiring failed crypto lender Voyager Digital, which was once a target of FTX.
However, Zhao has denied that Binance has directly benefited from its competitors’ woes. Earlier this week, he argued that his exchange is so dominant that it is less lucrative to grab market share from its competitors than to increase overall crypto adoption around the world, which he estimates to be about 0.5% of total global assets appreciates.
Another goal
With his tweet, however, Bankman-Fried may have targeted another crypto mainstay.
There has been speculation in the crypto community that Bankman-Fried’s cryptic reference to a “special sparring partner” may actually have been referring to his former colleague Sam Trabucco, who then ran Alameda Research until he left the quant hedge fund in August, citing the Desire to move on with his life.
As part of FTX’s bankruptcy, it emerged that Alameda had suffered heavy losses earlier this year following the collapse of stablecoin TerraUSD and was using FTX client funds to cover its bets.
CZ admitted as much on Thursday, saying he’s not entirely sure Bankman-Fried is trying to drag the Binance founder along with him.
“I’m actually not sure if this tweet is even being tweeted to me or to us,” he said at the Milken Institute event.
“Walking Time Bomb”
Zhao, meanwhile, had to fight back earlier this week for legitimizing FTX as a safe exchange with its own stamp of approval, having advocated it early on, despite the fact that the company was found to lack even basic compliance guardrails.
“I understand the mood,” said the Binance founder, explaining that his business hadn’t gotten off scot-free either: “We were worth $580 million [FTX native token] FTT – we sold a small portion of this but still hold a very large bag. So I think we acted very ethically.”
Famed economist Nouriel Roubini called the entire crypto industry “completely corrupt” and told the UAE to expel Zhao as its resident is a “walking time bomb” and its exchanges are banned or under investigation in the US and UK.
Zhao responded that it was “rude” to spread misinformation: “We are the most licensed crypto exchange in the world,” he said on stage Thursday.
Our new weekly Impact Report newsletter will examine how ESG news and trends are shaping the roles and responsibilities of today’s leaders – and how best to address these challenges. Subscribe here.
