SBF Tried To Destabilize Crypto Market To Save FTX

On November 11, FTX Group and roughly 130 companies, comprising FTX Trading, FTX US, and Alameda Research, declared bankruptcy in the United States, citing a liquidity crunch. This occurred after SBF tried to destabilize the crypto market to save FTX, per reports.

SBF Tried To Destabilize Crypto Market To Save FTX Report

According to sources on December 9, Tether executives and Binance CEO Changpeng “CZ” Zhao were concerned that Sam Bankman-Fried (SBF), ex FTX CEO, was seeking to destabilize the crypto market in order to salvage the now-bankrupt exchange.

Messages from a Signal group chat titled “Exchange coordination” uncovered by The Wall Street Journal disclose an altercation between CZ and SBF on Nov. 10 about Tether’s stablecoin Tether.

According to the report, CZ and others in the group were concerned that Alameda Research’s trades might depeg the stablecoin, causing a cascading effect in crypto values. According to reports, Binance CEO confronted SBF:

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

In a response to the WSJ, SBF refuted the allegations. Among those in the Signal group are Kraken co-founder Jesse Powell and Paolo Ardoino, chief technology officer of Tether.

The reported altercation occurred just one day after Binance stated that it would not bail out its ailing competitor FTX, citing “reports regarding mishandled customer funds and alleged US agency investigations.” Tether’s Ardoino also stated on November 10 that the company has no “plans to invest or lend money to FTX/Alameda.”

According to Cointelegraph, additional information concerning the failed arrangement between Binance and FTX was published on December 9. CZ refers to Bankman-Fried as a “fraudster” on Twitter, claiming that Binance abandoned its position in FTX in July 2021 after feeling “increasingly uncomfortable with Alameda/SBF.” According to Binance’s CEO, SBF was “unhinged” when the exchange pulled out.

SBF responded by claiming that Binance “threatened to walk at the last minute,” accusing CZ of lying about his role in the agreement.

On November 11, FTX Group and roughly 130 companies, comprising FTX Trading, FTX US, and Alameda Research, declared bankruptcy in the United States, citing a “liquidity crunch”.

SBF has already been named in seven class action lawsuits and other probes and investigations since FTX’s bankruptcy, as well as a market manipulation probe by federal authorities.

Bankman-Fried was candid in his prepared statements for the hearing when describing his predicament. Nevertheless, Sam Bankman-Fried was arrested in the Bahamas and charged with wire/securities fraud and money laundering.

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