Sam Bankman-Fried Realizes His Twitter Fight With Rival CZ Could Be What Killed FTX: ‘Not a Good Strategic Move on My Side’
Sam Bankman-Fried, founder of the crashed crypto exchange FTX, has a lot of regrets. But the chief among them is the one who may have directly led to his company’s downfall.
While lobbying for favorable regulation of cryptocurrencies in Washington, DC, Bankman-Fried in meetings privately criticized Changpeng Zhao, the CEO of rival exchange Binance. The whisper campaign news returned to Zhao, who finally got FTX clients to withdraw their deposits by tweets that he would sell off his massive holdings in that company’s in-house cryptocurrency, FTT.
Mr. Bankman-Fried said in an interview with the The New York Times published on monday, just days after FTX declared bankruptcy. “I was pretty frustrated with a lot of the things that I saw happening, but I should understand that it was not a good decision on my part to express it.”
Now Bankman-Fried, commonly referred to by crypto industry insiders by his initials, SBF, is at the center of a firestorm on the explosion. Government in the Bahamaswhere his company is located, and in the USis investigating what happened to FTX, which was valued at $32 billion earlier this year, and whether criminal charges are warranted.
The company’s spectacular disbandment also caused major aftershocks in the crypto industry, which has already faced headwinds due to a slow-growing economy. As soon as Bankman-Fried’s business troubles became public, almost every cryptocurrency immediately dropped in value.
At one point last week, Zhao, after sparking the race to enter FTX, offered to rescue the company by buying it. But after examining its books, he withdrew the offer, saying he had found serious financial problems.
Using the chat app Signal with Bankman-Fried and his representatives, Mr. Zhao simply posted a short note announcing the news, according to two people interviewed by the newspaper. The New York Times: “Sam, I’m sorry, but we won’t be able to continue this deal. Too many problems. CZ.
Bankman-Fried responded to the refusal by telling employees in a text message that time: “I shouldn’t have thrown stones into the greenhouse, so I’ll hold off for a bit. Except to say: they probably never really planned to do this deal.”
Within days of bankruptcy, Bankman-Fried, who lost most of his $16 billion fortune in the crash, said he was handling it relatively well. “You might think I wouldn’t be able to sleep right now, and I’m sleeping instead,” he said. “It could have been worse.”
Also, Bankman-Fried said he relaxes by playing video games quarrel story book—albeit from an undisclosed location out of fear for his safety.
“It helps me relax a bit,” he said. “It helps clear my mind.”
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