SBF Tried to Destabilize Crypto Market to Save FTX: Report

Tether executives and Binance CEO Changpeng “CZ” Zhao are worried that Sam Bankman-Fried (SBF), the former CEO of FTX, is trying to destabilize the crypto market, aiming to save the already bankrupt exchange. According to to the reports on Dec. 9

Messages seen by The Wall Street Journal on a Signal group chat called “Exchange Coordination” reveal a dispute between CZ and SBF on November 10 over Tether’s USDT stablecoin.

According to the report, CZ and others in the group are concerned that trades made by Alameda Research focus on the stablecoin’s depeg, which would have a ripple effect in crypto prices. Binance’s CEO reportedly confronted the SBF:

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

SBF denied the allegations in a statement to the WSJ. Members of the Signal group include Kraken co-founder Jesse Powell, Paolo Ardoino, Tether’s chief technology officer, among others.

The alleged argument happened a day later Binance has announced that it will not bail out its troubled rival FTX, citing “reports of misappropriation of client funds and alleged investigations by US agencies.” On November 10, Tether’s Arduino also said the company have “no plans to invest or lend money to FTX/Alameda.”

As reported by Cointelegraphnew details of the failed agreement between Binance and FTX were revealed on December 9. In a CZ Twitter thread recommended to Bankman-Fried as a “fraud,” saying Binance exited its FTX position in July 2021 after becoming “increasingly uncomfortable with Alameda/SBF.” According to Binance’s CEO, SBF was “upset” at the exchange’s withdrawal.

In response, SBF said Binance “threatened to pull out at the last minute,” accusing CZ of lying about its role in the deal.

On November 11, FTX Group and nearly 130 companies – including FTX Trading, FTX US, under West Realm Shires Services and Alameda Research – filed for bankruptcy in the United States citing a “liquidity crunch”.

Since the FTX bankruptcy, SBF has been named in seven class-action lawsuits and numerous studies and investigations, including market manipulation investigation by federal prosecutors.