Binance CEO calls Sam Bankman-Fried 'one of the greatest fraudsters in history'

Quick Take

  • Changpeng “CZ” Zhao branded former FTX CEO Sam Bankman-Fried a “fraudster” and “master manipulator.”
  • The Binance CEO rejected claims his Nov. 6 tweet on FTT was responsible for the fall of FTX.
  • Other crypto exchange CEOs have also condemned Bankman-Fried. 

Binance CEO Changpeng “CZ” Zhao branded Sam Bankman-Fried “one of the greatest fraudsters in history” after his FTX crypto exchange collapsed, leaving more than a million creditors out of pocket.

“He is also a master manipulator when it comes to media and key opinion leaders,” CZ said in a tweet thread giving his take on some of the narratives surrounding last month's sudden implosion.

Among them, CZ rejected claims he "destroyed" FTX with a Nov. 6 tweet that he would liquidate Binance's holdings of the rival exchange's native token, FTT.

“No healthy business can be destroyed by a tweet. However, there was a tweet that may have, Caroline’s tweet 16 minutes after mine on Nov 6. Data shows it was the real cause for people to dump FTT,” he said, referring to a Twitter post from Caroline Ellison, the former CEO of FTX's sister trading firm, Alameda Research.

Not just CZ

Other cryptocurrency exchange CEOs have also condemned Bankman-Fried and criticised the response to FTX's collapse, including that media have been too sympathetic towards the disgraced former executive.

Kraken CEO Jesse Powell called out Bankman-Fried last week following the latter’s appearance on a Twitter space, saying he was “completely full of shit about how margin trading works.”

“He's saying that the whole exchange operated on a net account equity model and anybody could borrow anything (in any amount?) from client funds or from nowhere. That's not how it should work,” Powell said.

The next day he added that he didn't believe Bankman-Fried set out to hurt people.

"I think he just didn't care or he was recklessly overconfident. It doesn't matter though. What matters is he knew he was gambling with his clients' money," he said.

Armstrong finds it 'baffling'

However, Coinbase CEO Brian Armstrong said he finds it “baffling" that Bankman-Fried is not in custody already. He made the comments during the a16z Crypto Founders Summit.

Armstrong has used the example of FTX to support his argument that there needs to be more regulatory clarity for exchanges.

“Crypto regulation in the U.S. has been hard to navigate, and regulators have so far failed to provide a workable framework for how these services can be offered in a safe, transparent way,” he wrote in a CNBC op-ed in November.


© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.