Binance CEO Changpeng Zhao has gone on the record accusing FTX CEO Sam Bankman-Fried of being a dangerous lunatic, after the FTX CEO threatened to expose information which would potentially damage the reputation of Binance’s CEO, known as CZ.
On Thursday, responding to a question from a moderator at a Milken Institute summit, Zhao said, “Only a psychopath can write that tweet.”
The comment was made about a tweet from Bankman-fried noting he, “might have more to say about a particular sparring partner.”
Previously Zhao had accused Bankman-Fried and FTX of releasing information which endangered his children, noting he had evidence which pointed to FTX as the source of the information.
Binance’s founder reportedly set off the collapse of FTX when he tweeted he would be selling all of his FTT tokens, a token used by FTX in its exchange. Customers rushed to exchange their tokens for cash at the exchange, setting off a liquidity crisis which ultimately took down the exchange.
It was later revealed that without notifying customers, $10 billion in customer funds had been moved from FTX to Bankman-Fried’s trading company, Alameda Research, in part to cover loans which had been called due by banks. The crisis has wiped out all of Bankman-Fried’s estimated $26 billion fortune, and as regulators close in, it appears he may be looking at prison time.
Binance has now emerged from the collapse as the most powerful operator in the crypto ecosystem, even as the contagion has spread throughout the industry.
Genesis Global Capital, a unit of Barry Silbert’s Digital Currency Group, is presently undergoing its own liquidity crisis. As Genesis Global has halted withdrawals, that has spread to Gemini, which had partnered with Genesis on its Earn yield-paying account service, which now cannot be withdrawn from.
Although Zhao interpreted that tweet as targeting him, others thing Bankman-Fried may have been referencing another “sparring partner.” Some believe he was referring to his former colleague Sam Trabucco, who ran Alameda Research until August before departing to pursue other endeavors.
CZ acknowledged this Thursday, saying, “I’m actually not sure if that tweet is even tweeted at me, or us.”
Zhao meanwhile was criticized for his early backing of FTX, which many saw as a seal of approval, even though it now appears FTX lacked even the most basis compliance guardrails from the very start.
“I understand the sentiment,” Zhao said. However he noted even Binance was hard hit by the collapse of FTX, pointing out, “We had $580 million worth of [FTX native token] FTT—we sold a small portion of it, but we still hold a very large bag. So I think we acted in very ethical ways.”
Responding to an attack by “Dr Doom” Nouriel Roubini, who framed the entire crypto industry as “totally corrupt,” and singled out Zhao in particular ad being in need to regulator scrutiny, Zhao said it was, “impolite” to spread misinformation. He noted, “We’re the most licensed crypto exchange in the world.”
