According to former Alameda Research CEO Caroline Ellison, a single tweet from Binance CEO Changpeng Zhao (CZ) contributed to the failure of cryptocurrency exchange FTX.
Ellison was reportedly testifying in the criminal trial of Sam “SBF” Bankman-Fried on October 12 Developed Part of the blame for FTX’s collapse falls on social media activity in Czechoslovakia. In the now famous tweet on X (formerly Twitter) dated November 6, 2022, CZ Announce Binance will liquidate its holdings of FTX Token (FTT) due to the recent revelations [sp] “For light.”
As part of Binance’s exit from FTX shares last year, Binance received the equivalent of approximately $2.1 billion in cash (BUSD and FTT). Given the recent revelations, we have decided to liquidate any remaining financial transaction tax on our books. 1/4
— Czechoslovakia Binance (@cz_binance) November 6, 2022
The liquidation of the tokens, according to several reports, led retail investors to follow Binance’s example and withdraw funds from FTX. The operation on the platform led FTX to halt withdrawals and file for bankruptcy on November 11.
According to Ellison, although the tweet “contributed” to FTX’s collapse, the main reason was that Alameda borrowed $10 billion from the exchange “it couldn’t repay.” She first took the stand at the SBF trial on October 10, testifying before Bankman-Fried directed her to get Alameda billions of dollars from FTX without users’ consent.
Czechoslovakia to push He responded to claims that one of his tweets “ruined FTX” in a December 6 thread, saying “no healthy business can be ruined by a tweet.” He pointed to Ellison’s social media activity from November 6, claiming that Alameda’s bid to buy Binance’s FTT holdings “was the real reason people were dumping” the tokens.
4. “Czechoslovakia tweet destroyed FTX”
No healthy business can be destroyed by a tweet.
However, there was a tweet that may have contained Carolyn’s tweet 16 minutes after my post on November 6th. Data shows this is the real reason people abandon FTT:https://t.co/yWFqKvbqMU
— Czechoslovakia Binance (@cz_binance) December 6, 2022
Among the information provided by the former Alameda CEO during the trial were Bankman-Fried’s ambition to become President of the United States, the creation of multiple “alternative” spreadsheets of Alameda’s financial statements to submit to Genesis, and SBF’s eyeing of Saudi Crown Prince Mohammed bin Salman as President of the United States. . Potential supporter of the exchange. Her testimony under cross-examination by defense attorney Mark Cohen appeared to focus on Bankman-Fried’s knowledge of the Alameda operations.
Under cross-examination by Cohen, Ellison testified that she “may have said that.” [SBF] “She may not have been aware” of her “concerns that FTX client funds were being put at risk.” Danielle Sasson, Assistant US Attorney, described this claim as “vague.”
Related: FTX Hacker Moved $120 Million Amid Sam Bankman-Fried Trial: Report
Ellison took the stand on the seventh day of SBF’s criminal trial, which began on October 3. She was one of the first FTX and Alameda insiders to plead guilty as part of an agreement with US authorities over her testimony.
Bankman-Fried has pleaded not guilty to seven felony charges in his first trial, which is expected to last until November. He will face five additional charges in a March 2024 trial.
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