Key Points
- Binance founder CZ discloses Sam Bankman-Fried requested billions with remarkable casualness during FTX’s final hours.
- The letter of intent between Binance and FTX represented a procedural gesture rather than genuine acquisition interest.
- Caroline Ellison’s attempt to establish a support price for FTT tokens backfired, accelerating market devastation.
- Binance weathered a massive $7 billion withdrawal wave following the FTX disaster while maintaining full solvency.
- Customer confidence returned swiftly, with users redepositing funds and adding new capital within weeks of the withdrawal surge.
The founder of Binance, Changpeng Zhao, has disclosed remarkable details about a phone conversation with Sam Bankman-Fried (SBF) during the final days before FTX imploded. According to his newly published memoir Freedom of Money, Zhao recounts how Bankman-Fried requested multiple billions of dollars with an alarming sense of casualness. This extraordinary conversation occurred immediately before Binance explored purchasing FTX in November 2022, an arrangement that quickly dissolved.
According to Zhao’s account, signing the non-binding letter of intent served purely as an exploratory measure with zero authentic acquisition appetite. He emphasized the document functioned as a formality, designed simply to examine FTX’s financial records. Zhao’s memoir makes his position unmistakable: he harbored no desire to rescue Bankman-Fried or his struggling empire.
Binance’s Acquisition Letter Lacked True Intent
Changpeng Zhao characterizes the letter of intent as bureaucratic procedure rather than meaningful commitment. His memoir states, “I was explicit that we were not making any commitment. Our team would simply assess the numbers and then decide.” He concedes, however, that Binance possessed the capacity to shield FTX customers and prevent additional damage to the cryptocurrency sector.
Zhao discloses that Bankman-Fried’s appeal for “a couple of billion dollars” arrived with stunning nonchalance, comparable to “asking for a bologna sandwich.” This remarkably relaxed approach deepened Zhao’s doubts about the situation. The potential acquisition crumbled rapidly, with Binance officially abandoning talks to purchase FTX on November 9, 2022, following their discovery of the exchange’s catastrophic financial condition.
How Alameda’s Strategy Accelerated FTX’s Demise
The downfall of FTX gained momentum after Caroline Ellison, leading Alameda Research, attempted purchasing Binance’s FTT token portfolio. She proposed acquiring the tokens at $22 per unit, hoping to prevent further price deterioration. Zhao identifies this maneuver to establish a price floor as a devastating miscalculation. Publicly announcing the specific price invited market participants to exploit the information through aggressive short positions.
The strategy backfired spectacularly, with FTT’s value collapsing from $22 to merely $5 across 72 hours. Zhao observes that during this compressed timeframe, approximately $6 billion fled the FTX platform. Binance remained stuck with a rapidly devaluing asset, previously valued at $580 million during peak market conditions. Zhao referenced earlier setbacks, including the $1.6 billion loss sustained during the LUNA market crash.
Following FTX’s spectacular failure, Binance confronted significant liquidity pressures. December 14, 2022, saw the exchange process withdrawals totaling $7 billion within 24 hours. Zhao maintained composure throughout the crisis, expressing complete confidence in the platform’s stability. He publicly assured customers that every account remained fully backed, with ample reserves available to honor all withdrawal requests.
Zhao’s assessment proved accurate, as customer deposits returned within 30 days alongside fresh capital inflows. Despite the temporary withdrawal surge, Binance successfully navigated the turbulence, preserving its status among the world’s dominant cryptocurrency trading platforms.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
