Changpeng Zhao’s tweet ‘contributed’ to collapse of FTX, claims Caroline Ellison

In accordance to former Alameda Analysis CEO Caroline Ellison, a single tweet from Binance CEO Changpeng “CZ” Zhao contributed to the failure of cryptocurrency trade FTX.

Testifying in Sam “SBF” Bankman-Fried’s prison trial on Oct. 12, Ellison reportedly placed half of the blame for the collapse of FTX on CZ’s social media exercise. Within the now well-known tweet on X (previously Twitter) from Nov. 6, 2022, CZ announced that Binance could be liquidating its holdings of FTX Token (FTT) “due to current revelations which have got here to mild.” 

As half of Binance’s exit from FTX fairness final yr, Binance acquired roughly $2.1 billion USD equal in money (BUSD and FTT). Due to current revelations which have got here to mild, we have now determined to liquidate any remaining FTT on our books. 1/4

— CZ Binance (@cz_binance) November 6, 2022

In accordance to many experiences, the liquidation of the tokens triggered retail buyers to comply with Binance’s instance and withdraw funds from FTX. The run on the platform led to FTX halting withdrawals and submitting for chapter on Nov. 11.

In accordance to Ellison, though the tweet “contributed” to FTX’s collapse, the principle cause was Alameda borrowing $10 billion from the trade “it couldn’t repay.” She first took the stand in SBF’s trial on Oct. 10, testifying that Bankman-Fried directed her to have Alameda take billions of {dollars} from FTX with out customers’ consent.

CZ pushed back towards claims that one of his tweets “destroyed FTX” in a Dec. 6 thread, saying, “No wholesome enterprise will be destroyed by a tweet.” He pointed to Ellison’s personal social media exercise from Nov. 6, claiming Alameda’s supply to purchase Binance’s FTT holdings “was the actual trigger for individuals to dump” the tokens.

4. “CZ’s tweet destroyed FTX”

No wholesome enterprise will be destroyed by a tweet.

Nonetheless, there was a tweet that will have, Caroline’s tweet 16 minutes after mine on Nov 6. Knowledge reveals it was the actual trigger for individuals to dump FTT:https://t.co/yWFqKvbqMU

— CZ Binance (@cz_binance) December 6, 2022

The knowledge offered by the previous Alameda CEO at trial included Bankman-Fried’s apparent ambition to develop into the president of the US, creating a number of “different” spreadsheets of Alameda’s financials to current to Genesis, and SBF looking to Saudi Crown Prince Mohammed bin Salman as a possible backer of the trade. Her testimony on cross-examination from protection counsel Mark Cohen appeared to concentrate on Bankman-Fried’s information of Alameda’s operations.

On questioning from Cohen, Ellison testified that she “might need stated that [SBF] may not have identified” about her considerations “placing FTX prospects’ funds in danger.” Assistant U.S. Legal professional Danielle Sassoon referred to as the declare “imprecise.”

Associated: FTX hacker moves $120M amid Sam Bankman-Fried trial: Report

Ellison took the stand on the seventh day of SBF’s prison trial, which started on Oct. 3. She was one of the primary FTX and Alameda insiders to plead responsible as half of an settlement with U.S. authorities for her testimony.

Bankman-Fried has pleaded not responsible to seven prison expenses in his first trial, anticipated to run via November. He’ll face a further 5 counts in a March 2024 trial.

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