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- Sam Bankman-Fried said Alameda’s assets were the focus of a “targeted attack” by Binance CEO Changpeng Zhao.
- “In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,” Bankman-Fried wrote.
- Bankman-Fried previously had only hinted at Zhao’s role but on Thursday took direct aim at his one-time rival.
Sam Bankman-Fried accused Binance CEO Changpeng Zhao of orchestrating the liquidity crisis that eventually caused the downfall of FTX.
In early November, Zhao tweeted that Binance would dump its holdings of FTX’s native token, citing a report in CoinDesk that said FTT made up much of Alameda Research’s assets. That sparked massive withdrawals from FTX, which filed for bankruptcy days later.
Since then, Bankman-Fried previously had only hinted at Zhao’s role in the chain of events. But in a Substack post on Thursday, he took direct aim at his one-time rival.
“In November 2022, an extreme, quick, targeted crash precipitated by the CEO of Binance made Alameda insolvent,” Bankman-Fried said.
He added that the contagion from Alameda spread to FTX and elsewhere, comparing it to how the collapse of Three Arrows in the spring of 2022 reached Voyager and other crypto platforms.
To be sure, Bankman-Fried also attributed the FTX crash to other factors, including Alameda’s failure to sufficiently hedge its exposure. A series of crashes in the crypto market last year led to a roughly 80% decline in the value of Alameda’s assets.
“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%.”
For his part, Zhao has downplayed his role in FTX’s collapse, saying “I think we were the last straw that broke the camel’s back. It’s not a straw that is really strong.”
Binance agreed on November 8 to take over FTX and rescue Bankman-Fried, but pulled out a day later after noting concerns while performing due diligence.
FTX filed for bankruptcy protection on November 11 and is currently being led by new CEO John Ray III. Bankman-Fried was charge with fraud in December and has pleaded not guilty.
Elsewhere in his Substack post, Bankman-Fried also said FTX International had $8 billion in assets when Ray took over. He also expressed regret for FTX’s bankruptcy filing and claimed customers can still recover a significant share of their assets.