Binance CEO Changpeng ‘CZ’ Zhao weighs in on the future of crypto and the much-publicized tweetstorm of former FTX CEO Sam Bankman-Fried (SBF) before the exchange collapsed.
After fending off an attack on the crypto industry by outspoken Turkish-American economist Nouriel Roubini, CZ unpacked the events just before Binance provisionally agreed to buy FTX.com.
At the Abu Dhabi Finance Week in on Nov. 16, 2022, Roubini called CZ’s presence in the UAE a “walking time bomb.”
CZ said SBF’s call was about “real trouble” at FTX
CZ said that he initially thought that SBF called him to discuss the possibility of an over-the-counter deal to buy FTT, FTX’s native token, to calm markets down.
FTX customers began withdrawing FTT after CZ tweeted on Nov. 6, 2022, that Binance would liquidate its $580 million in FTT holdings as a risk management measure. Binance received FTT after exiting its position as an equity investor in 2021 but later sold the tokens.
By Nov. 8, 2022, FTX could not process the avalanche of withdrawals and called on CZ and Binance to help.
But it quickly became clear that the company had troubles extending beyond FTT and was “looking for a buyout,” CZ said. Binance then signed a non-binding agreement to acquire FTX but later pulled out after finding a hole in the exchange’s balance sheet.
CZ: SBF lost focus, should not have been tweeting
CZ criticized SBF for writing tweets during the company’s recent crisis, saying he should have been busy with other things.
When asked about a tweet by SBF in which he referred to a “sparring partner,” CZ said, “I think only a psychopath can write that tweet. When he tweets about a sparring partner and when his house is burning, he’s losing focus.”
Before FTX engaged Tron founder Justin Sun to swap specific Tron tokens held on FTX into self-custodial wallets, CZ said that he told SBF, “Don’t do anything more, put on a suit, go back to D.C. and start answering questions.”
He added that Binance, the world’s largest crypto exchange by trading volume, does not view other crypto exchanges as competition because the industry is relatively new. Rather than trying to steal market share from each other, CZ believes that exchanges like FTX should have focused on growing the industry.
“So it’s much better for me to sit here and speak to all of you than looking at what FTX does and trying to take market share away from them. They may think it’s more meaningful to take market share away from us, but that’s actually [a] limited mindset. They should try to grow the industry and not lobby against other players in the industry,” CZ said.
CZ told CNBC that the collapse of FTX “will set us back a bit,” but the crypto industry will become stronger.
He also said that he sees a future in crypto because of the underlying technologies that provide better ways to transact and make international payments. While he doesn’t believe analysts’ price predictions, he sees the industry growing in the next five to ten years.
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