Join Our Telegram channel to stay up to date on breaking news coverage
Alameda Research CEO Caroline Ellison said a tweet by Binance CEO Changpeng Zhao was partly to blame for the collapse of the cryptocurrency exchange FTX.
Her comment came in testimony on Oct. 12 at the criminal trial of FTX founder and former boyfriend, Sam Bankman-Fried.
She was referring to a tweet on 6 Nov. last year when Zhao announced Binance’s intention to liquidate its holdings of the FTX token FTT.
“Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books,” Zhao tweeted.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 BNB (@cz_binance) November 6, 2022
Binance Announcement Triggered Chain Reaction
Ellison said the public announcement of the liquidation by the world’s largest cryptocurrency exchange triggered a chain reaction that prompted retail investors to sell their tokens as well.
The subsequent bank-like run on the exchange left FTX with no choice but to halt withdrawals before filing for bankruptcy on 11 Nov. last year.
Although Ellison placed part of the blame on Binance’s CEO, she emphasized that the primary reason for FTX’s collapse was that Alameda Research was unable to repay $10 billion it borrowed from the exchange.
CZ responded to similar claims back in November last year, when he tweeted that “no healthy business can be destroyed by a single tweet.”
He then pointed to Ellison’s own social media activity on 6 Nov., which said that Alameda’s offer to buy Binance’s FTT holding was the true catalyst for FTX’s implosion.
4. “CZ’s tweet destroyed FTX”
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:https://t.co/yWFqKvbqMU
— CZ 🔶 BNB (@cz_binance) December 6, 2022
Ellison’s testimony took place on the 7th day of Bankman-Fried’s trial. She pleaded guilty as part of a plea deal with prosecutors and is testifying against her former boyfriend.
Related Articles
- Binance Freezes Hamas Accounts After Israeli Request
- JPMorgan Expects Bitcoin Hash Rate to Drop by 20% After Next Year’s Halving
- Russian Cybercriminal Groups Suspected in FTX Hack
Join Our Telegram channel to stay up to date on breaking news coverage
