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»Sam Bankman-Fried holds Changpeng Zhao accountable for FTX’s “targeted” campaign«
Sam Bankman-Fried on Thursday accused Binance CEO Changpeng “CZ” Zhao of pursuing a protracted campaign to ruin his crypto enterprise, while making yet another attempt to explain what caused FTX’s devastating bankruptcy.
In a lengthy Substack article, the disgraced former CEO of FTX claimed that Zhao’s “disastrous tweet” on November 6 culminated a “extremely effective months-long PR campaign against FTX.”
“In November 2022, Alameda became insolvent as a result of an extreme, targeted, and swift crash precipitated by the CEO of Binance,” Bankman-Fried said.
Shortly after Zhao tweeted that Binance would sell its position on FTX’s internal digital token FTT, the business of the disgraced FTX founder failed.
The tweet triggered a domino effect that led to the collapse of Bankman-crypto Fried’s hedge fund Alameda Research and the bankruptcy filing of FTX on November 11.
The blog post constituted some of Bankman-first Fried’s public statements since he pleaded not guilty to eight federal fraud charges related to FTX’s collapse on January 3. The federal government has accused the 30-year-old of perpetrating a conspiracy to defraud FTX customers out of billions of dollars, which he used to fund his opulent lifestyle and reckless wagers at Almeda.
Since FTX’s demise, Bankman-Fried and Zhao have regularly traded insults. In December, Zhao responded directly to allegations that his activities caused the bankruptcy by tweeting, “FTX killed themselves (and their users) by stealing billions of dollars in user funds.”
“A tweet cannot destroy a healthy business,” Zhao remarked.
In the post, Bankman-Fried reiterated many of his earlier defenses and maintained his innocence on the fraud accusations. The former head of FTX, who claimed to be down to his last $100,000, also denied possessing a hidden cache of cash.
“I did not steal money, nor did I hide billions of dollars,” Bankman-Fried added. Nearly all of my assets were and continue to be usable to support FTX customers.
In bankruptcy court, Bankman-Fried has been engaged in a separate legal battle with the federal government and other creditors for a $460 million interest in Robinhood. The attorneys for Bankman-Fried have claimed that he should maintain control of the interest to finance his legal defense.
“[I have] offered to donate nearly all of my personal Robinhood shares to customers, or 100 percent, if the Chapter 11 team honors my D&O legal expense indemnification,” he said.
The post by Bankman-Fried contained a number of graphs illustrating his “estimates” of the financial problems at FTX and Alameda. He stated that Alameda had a $100 billion net asset worth as recently as 2021.
That is to say, no funds were stolen, wrote Bankman-Fried. Alameda lost money due to an inadequate hedging against a market catastrophe.
Bankman-Fried is currently subject to house arrest at his parents’ California mansion. If convicted on all counts, he faces up to 115 years in jail.
Several former officials from FTX and Alameda, including Caroline Ellison and Gary Wang, are helping with authorities in their investigation against Bankman-Fried.
»Sam Bankman-Fried holds Changpeng Zhao accountable for FTX’s “targeted” campaign«