Binance CEO Goes Full FUD in Attempt to Bury FTX

What happens when two of crypto’s wealthiest billionaires have a public spat? FUD flies and markets spasm


Binance’s Changpeng Zhao


Two of crypto’s most powerful figures — Binance founder Changpeng Zhao and FTX CEO Sam Bankman-Fried — are locked in a rare public feud fueled by rumors and leaked documents.

Over the past week, rife speculation has posited that the cryptocurrency exchange FTX’s sister organization, Alameda Research, a quantitative trading shop-cum-venture capital firm, is facing insolvency. It’s known that Alameda, like many of its rivals, has been hit hard by turbulent market conditions and plunging venture-backed digital asset startup valuations. 

The company has denied the notion that it’s on the verge of insolvency.

Alameda’s balance sheet, reported by CoinDesk last Wednesday, showed about 40% of the firm’s $14.6 billion of assets were attributed to FTT, FTX’s native token that powers trades on the exchange.

Solana, the cryptocurrency behind the Bankman-Fried-backed blockchain, contributed nearly $1.2 billion, or about 8%. Relatively illiquid digital assets serum, maps, oxy and fida — all part of Alameda’s portfolio — made up some of the remainder, alongside loans, cash and equivalents, as well as $2 billion in undisclosed equity stakes.

So much exposure to tokens operationally close to Bankman-Fried and his companies immediately drew criticism from industry watchers, who worked to map various doomsday scenarios that could lead to Alameda’s implosion, perhaps in a Celsius-like manner.

Alameda CEO Caroline Ellison addressed the growing skepticism surrounding Alameda’s financial health on Sunday. She rebuffed claims that the firm is on the verge of insolvency, tweeting that the leaked balance sheet didn’t provide the full scope of Alameda’s assets.

Alameda has more than $10 billion of assets that weren’t taken into account in CoinDesk’s report, Ellison said, as well as a series of unspecified investment hedges intended to counteract the asset manager’s supposed outsized exposure to its own assets.

An hour later, Binance CEO Zhao tweeted he would liquidate his firm’s substantial FTT holdings — in a rare public instance of telegraphing a move before selling, one source said. The source, who spoke on the condition of anonymity to discuss sensitive business dealings, adding that doing so would invite the price to plunge. 

By his reasoning, Zhao said the move was a “post-exit risk management” strategy, invoking Do Kwon’s failed algorithmic stablecoin ecosystem Terra.

Binance intends to offload its position over the next few months in a bid to minimize market impact, Zhao tweeted. The exchange acquired $2.1 billion in FTT and Binance’s stablecoin BUSD as part of an exit from its FTX equity stake last year, he said.

While Binance’s total FTT holdings are not known, chain watcher Whale Alert tweeted on Sunday that roughly $585 million in FTT had been transferred to Binance as part of its liquidation efforts. 

The transfer was later confirmed by Zhao. Notably, Zhao’s tweets — and the transfer — occurred on Sunday, when markets are historically at their most inactive, translating to amplified price movements. FTT currently trades around $22.46, which is about 12% below its price point before Zhao’s dump pledge.

Ellison said FTX would buy Binance’s entire FTT stash at a rate of $22 per token.

Loading Tweet..
Doing deals on crypto Twitter could bring regulatory concerns.

Bankman-Fried and Zhao’s unfriendly rivalry

Bankman-Fried and Zhao’s sparring is the culmination of weeks of social media tit-for-tats. In an Oct. 19 blog, Bankman-Fried outlined proposals for a set of regulatory standards for the crypto industry.

The pair are in charge of the world’s top two crypto exchanges by daily volume. Binance handles some $7.3 billion in daily trades, while FTX manages roughly $2.6 billion. Their US-regulated platforms process considerably less — $380 million per day for Binance and about $174 million for FTX. 

Over the past few years, Bankman-Fried has been fashioned into something of a media darling. He regularly appears on mainstream television from his gamer chair and has starred in viral videos that publicize his Toyota Corolla (not a Lambo!) and his ideals of effective altruism, which would see Bankman-Fried give away most of his immense fortune to charity.

Zhao, on the other hand, plays the role of the quintessential crypto nomad, having bounced around the world as many times as Binance’s flagship platform has switched jurisdictions. He’s recently taken root in glitzy Dubai, where his own wealth appears to have opened the doors to a sense of belonging. 

Loading Tweet..
Sam Bankman-Fried took a shot at Zhao, infamous for globe-trotting regulatory arbitrage.

While Zhao has publicly fought to keep three-letter US agencies both at bay and on-side, Bankman-Fried has historically played a central role in shaping the narrative around crypto regulation. 

He’s lobbied extensively and contributed millions of dollars in donations to political candidates, including being the second-highest donor to President Joe Biden’s campaign before the 2020 US election.

But Bankman-Fried’s proposals last month ruffled feathers, included ceding ground to the US Treasury’s Office of Foreign Assets Control by automatically blacklisting sanctioned blockchain addresses.

Bankman-Fried also floated the establishment of a licensing regime for DeFi protocols and other blockchain-powered platforms set up by US individuals, leading to allegations of statism from some crypto purists.

Loading Tweet..
Crypto veteran Erik Voorhees debated Bankman-Fried last week.

“We are not against anyone,” Zhao tweeted on Sunday in an apparent response to Bankman-Fried’s commentary on regulation. “But we won’t support people who lobby against other industry players behind their backs.”

FUD for me but not for thee

Binance’s CEO attempted to dispel notions that offloading its FTT holdings was not part of a move against FTX, but more that it had purportedly held onto the asset long enough. 

The token currently trades nearly 75% below its all-time high reached last November, which means Binance has left plenty of gains on the table by opting to sell now.

Responding to the question of why Binance has waited so long to offload its FTT, Zhao claimed it’s meant to remove doubt the exchange would attack a competitor. 

“We want the industry to grow together,” Zhao said. “But there is a limit to hold.”

In any case, traders and other investors are taking heed of the muddled situation, pulling stablecoins, derivatives and other digital assets from the platform en masse. Binance and FTX did not immediately respond to requests for comment.

Loading Tweet..
More FTT is now on exchanges than ever before.

It’s certainly ironic that Binance’s Zhao, who has pandered to faithfuls by positioning himself as a fighter of all things FUD (fear, uncertainty and doubt), has so quickly pounced on wavering public perception of his direct rival Bankman-Fried. 

Curiously, Zhao now seems content to not only lean into media speculation, but incite it directly despite having repeatedly threatened to sue journalists and their news outlets throughout the years.

Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png


Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.



GBTC operator’s “eyes and ears are open” when approached about potential strategic deals, CEO Michael Sonnenshein says


The price of the UNI token has jumped from $7.24 to $10.22 in less than an hour


Avalanche nodes recently began the Durango upgrade, which is scheduled to activate on its mainnet next month


Pudgy also announced its toys would expand to an additional 1,100 Walmart stores this week


The new unlock schedule will see 580 million tokens unlock by the end of this year instead of 2 billion


Judge John Dorsey approved the motion to sell, which was filed earlier this month