SBF tried to destabilize crypto market to save FTX: Report

Tether executives and Binance CEO Changpeng “CZ” Zhao feared that former FTX CEO Sam Bankman-Fried (SBF) was trying to destabilize the crypto market in an effort to save the now-defunct exchange. bankruptcy, according to the December 9 reports.

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

According to the report, CZ and other members of the group feared that the transactions made by Alameda Research were focused on the depeg of the stablecoin, which would have a ripple effect on crypto prices. Binance CEO allegedly confronted SBF:

“Stop trying to depeat stablecoins. And stop messing around. Stop now, don’t cause more damage.

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

The alleged argument happened a day after Binance has announced that it will not bail out its struggling competitor FTX, citing “reports of mismanaged client funds and alleged investigations by US agencies.” On November 10, Tether’s Ardoino also said the company do not “intend to invest in or lend money to FTX/Alameda”.

As reported by Cointelegraphnew details about the failed deal between Binance and FTX were revealed on December 9. In a Twitter thread, CZ referred to Bankman-Fried as a “fraudster,” claiming that Binance exited its position in FTX in July 2021 after becoming “increasingly uncomfortable with Alameda/SBF.” SBF was “out of balance” upon withdrawal from the exchange, according to Binance CEO.

In response, SBF claimed that Binance “threatened to walk away at the last minute,” accusing CZ of lying about his 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 referring to a “liquidity crisis”.

Since FTX’s bankruptcy, SBF has been the subject of seven class action lawsuits and numerous inquiries and investigations, including a investigation into market manipulation by federal prosecutors.