Binance CEO Accuses Bankman-Fried of Engineering FTX Collapse in Targeted Attack

Sam Bankman-Fried has accused Binance CEO Changpeng Zhao of orchestrating FTX's collapse through a "targeted attack" on Alameda's assets. Bankman-Fried alleges that Zhao's public announcement of Binance's intention to sell FTT, Alameda's primary asset, sparked a liquidity crisis that led to FTX's bankruptcy. Despite Zhao downplaying his role, Bankman-Fried maintains that the November crash was a calculated move against Alameda, causing significant asset losses and ultimately triggering the contagion that affected FTX and other crypto platforms.

Binance CEO Orchestrated FTX Collapse Through Targeted Attack, Accuses Sam Bankman-Fried

Former FTX CEO Sam Bankman-Fried has launched a scathing attack on Binance CEO Changpeng Zhao, accusing him of engineering the liquidity crisis that led to FTX's downfall through a "targeted attack" on Alameda Research.

In a lengthy Substack post published on Thursday, Bankman-Fried presented a detailed account of the events leading up to FTX's bankruptcy, pointing the finger squarely at Zhao. He claims that Zhao's decision to publicly announce that Binance would be selling off its holdings of FTX's native token, FTT, triggered a massive wave of withdrawals from FTX, leading to its ultimate insolvency.

According to Bankman-Fried, Alameda's assets were the primary target of Zhao's attack. He alleges that the sudden and steep decline in Alameda's asset value was not a result of broad market forces but rather a deliberate maneuver by Binance to destabilize the company.

"In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent," Bankman-Fried wrote. "The contagion from Alameda spread to FTX and elsewhere, comparable to how the collapse of Three Arrows in the spring of 2022 reached Voyager and other crypto platforms."

Bankman-Fried acknowledges that Alameda's failure to adequately hedge its exposure also contributed to FTX's troubles, but he maintains that Zhao's actions were a major catalyst for the chain of events that led to the company's demise.

"But the November crash was a targeted attack on assets held by Alameda, not a broad market move," he added. "Over the few days in November, Alameda's assets fell roughly 50%."

Zhao has previously downplayed his role in FTX's collapse, claiming that Binance was merely "the last straw that broke the camel's back." However, Bankman-Fried's allegations paint a different picture, suggesting that Binance played a more active and malicious role in the company's downfall.

The accusations against Zhao come as FTX and its former executives face multiple investigations and lawsuits stemming from its collapse. Bankman-Fried himself has been charged with fraud and is currently awaiting trial.

In his Substack post, Bankman-Fried also addressed the controversy surrounding FTX's bankruptcy filing, claiming that FTX International had $8 billion in assets when new CEO John Ray III took over. He also expressed regret for the filing and expressed hope that customers could still recover a significant share of their assets.

The latest developments in the FTX saga further underscore the complex and contentious nature of the crypto industry, where high-stakes rivalries and allegations of foul play can have dramatic consequences. As regulators and law enforcement agencies continue to probe the collapse of FTX, the full extent of Binance's alleged role in the events may still come to light.