- CZ called SBF a “fraudster” and “unhinged”
- SBF said that CZ won and that there’s “no need to lie”
Friday Twitter fight between Changpeng (CZ) Zhao of Binance and Sam (SBF) Bankman-Fried revealed how the two became rivals.
In a fiery Twitter thread, CZ branded the former Bankman-Fried as a “fraudster.” He also revealed details about FTX’s buyout of Binance’s stake in the company. He said SBF was “unhinged” after Binance pulled out of its FTX investment.
The former FTX CEO claimed that CZ was lying about the deal. According to SBF, FTX initiated the buyout. He also said that Binance “threatened to walk at the last minute” without an additional $75 million.
"You won. There's no need to lie, now, about the buyout," SBF said.
‘O’Leary Aligned with a Fraudster’
The firestorm started when CZ responded to a Thursday interview with former FTX spokesperson Kevin O’Leary. In the interview, O’Leary suggested that Binance had issues with regulators.
"It seems $15m not only changed Kevin O'Leary's mind about crypto, it also made him align with a fraudster. Is he seriously defending SBF?" CZ said. O’Leary, whom FTX paid $15 million to be its paid spokesperson, said that FTX told him that one of the reasons why FTX was in trouble was its multibillion-dollar share buyback from Binance. Binance was an early investor in FTX, and owned 20% of the FTX at the time.
Himself an FTX investor, O’Leary said that the buyout cost FTX a “couple of billion” dollars. Moreover, he said he was forced to buy out Binance, due to regulatory concerns, suggesting that regulators were uneasy with Binance.
CZ responded with a link to more than 470 companies FTX invested in since the Binance buyout. The investments come up to a total of $5,3 billion.
How SBF and CZ Became Rivals – CZ’s Story
Binance CEO explained how the two CEOs of crypto exchanges went from partners to rivals. According to CZ, it all started when Binance decided to pull out of FTX.
CZ said that Binance decided to pull out of FTX after becoming “increasingly uncomfortable” with how SBF ran FTX and sister firm Alameda Research. He claimed that the decision prompted Bankman-Fried to lash out at them.
"Sam was so unhinged when we decided to pull out as an investor that he launched a series of offensive tirades at multiple Binance team members, including threatening to go to 'extraordinary lengths to make us pay,'" CZ said. He added that he has text messages to prove it. Following Binance’s exit, SBF began investing in friends in high places – from media, to policymakers, to celebrities (like Kevin), CZ said.
That’s also when SBF started attacking Binance and him personally, CZ said. “My ethnicity was a focus of those attacks,” CZ said. “I’m Canadian and Binance is not a Chinese company,” he added.
CZ also pointed out the extravagant amount of money FTX was spending on marketing.
"You don't have to be a genius to know something doesn't smell right at FTX," CZ said. "They were 1/10th our size, yet outspent us 100/1 on marketing & "partnerships," fancy parties in the Bahamas, trips across the globe, and mansions for all of their senior staff (and his parents)," he added.
On the Flipside
- Both SBF and CZ are heavily vested in their own point of view, both personally and financially.
Why You Should Care
Understanding the key players in the space, and their motivations, is critical for traders. This exchange battle between CZ and SBF sheds light on the tensions between Binance and FTX, formerly two major rivals in the space.
Read about SBF’s upcoming congressional testimony:
SBF Agrees to Testify Before Congress: Will They Ask the Real Questions?
Read about the latest SBF interview:
Bankman-Fried Says His Bank Account is Down to $100k, FTX’s Collapse was Preventable