Binance founder Changpeng Zhao (CZ) says Sam Bankman-Fried asked him for “a few billion dollars nonchalantly, like he was asking for a bologna sandwich” during the phone call that preceded Binance’s attempt to acquire FTX in November 2022, and that he never had any intention of going through with it.
“I had no interest in owning FTX. Nor was I that interested in helping SBF,” Zhao writes in his memoirs Freedom of moneypublished Tuesday. “But we may have to step in to protect users and the industry.” He signed the non-binding letter of intent, he says, purely as a formality: “I was explicit that we were not committing. Our team would simply assess the numbers and then decide.”
As for the collapse itself, Zhao is aware of where it unraveled. When Alameda CEO Caroline Ellison publicly offered to buy Binance’s FTT holdings at $22 each — an attempt to stabilize the market — Zhao says she made “a fatal mistake.”
“She had just revealed her floor price,” he writes. Professional traders immediately shorted FTT through that level. The token dropped to $15, then $10, then $5. Within 72 hours, $6 billion had left FTX.
Zhao also reveals the existence of the “Exchange Collaboration”, a signaling group created by FTX’s Zane Tackett during the Terra/LUNA collapse earlier that year, which included Zhao, Bankman-Fried, Brian Armstrong of Coinbase, Jesse Powell of Kraken and others. The group later attracted investigations from DOJ and SEC investigators. “They were eager to find any hint of collusion or market manipulation between the exchanges,” Zhao writes. “Of course there was no such thing in this case.”
By November 9, Binance had walked away from the deal. Binance’s own FTT holdings — worth $580 million at their peak — had become “basically worthless,” Zhao writes, echoing the company’s $1.6 billion LUNA wipeout six months earlier.
The aftermath brought a bank run on Binance, with $7 billion withdrawn in a single day on December 14. Zhao says he spent that evening having dinner with friends. “I wasn’t worried,” he writes. “All means of use were in our reserves.” Within a month, he says, users had deposited it all back—and more.
