To Save FTX, SBF Tried to Destabilize the Crypto Market

1. Sam Bankman-Fried tried to destabilize the crypto market.
2. This was allegedly a step towards saving his defunct exchange, FTX.
3. More information was made public on the failed deal between Binance and FTX.

According to sources on Dec. 9, Tether executives and Binance CEO Changpeng “CZ” Zhao had concerns against Sam Bankman-Fried (SBF). The former FTX CEO was trying to disrupt the cryptocurrency market in order to salvage the now-defunct exchange.

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The Wall Street Journal has obtained messages from a Signal group chat called “Exchange coordination.” This shows a dispute between CZ and SBF on November 10 about Tether’s stablecoin USDT.

The article claims that CZ and other group members were concerned that Alameda Research’s transactions were concentrating on de-pegging the stablecoin. This would therefore negatively impact cryptocurrency values. The CEO of Binance apparently challenged SBF:

“Stop trying to depeg stablecoins. And stop doing anything. Stop now, don’t cause more damage.”

SBF responded to the WSJ with a denial of the allegations. Jesse Powell, a co-founder of Kraken, and Paolo Ardoino, the chief technical officer of Tether, among others, are members of the Signal group.

The claimed altercation allegedly occurred the day after Binance stated it wouldn’t help ailing rival FTX. They cited “claims surrounding mismanaged client cash and suspected US government investigations.” On November 10, Ardoino said that Tether had no “plans to invest in or lend money to FTX/Alameda.”

On December 9, more information was made public on the failed deal between Binance and FTX. In a Twitter thread, CZ called Bankman-Fried a “fraudster.” 

He also said that Binance had sold its holdings in FTX in July 2021 because it had become “increasingly uneasy about Alameda/SBF.” The CEO of Binance said that SBF was “unhinged” at the exchange’s decision to leave.

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