Alameda Research CEO Blames Binance CEO for FTX Collapse
According to Alameda Research CEO Caroline Ellison, a tweet by Binance CEO Changpeng Zhao played a role in the collapse of cryptocurrency exchange FTX. Ellison made this statement during her testimony at the criminal trial of FTX founder Sam Bankman-Fried. The tweet in question was posted on November 6th of last year when Zhao announced Binance’s intention to liquidate its holdings of the FTX token FTT. This public announcement triggered a chain reaction that led to retail investors selling their tokens and ultimately resulted in FTX having to halt withdrawals and file for bankruptcy.
However, Ellison also acknowledged that the primary reason for FTX’s collapse was Alameda Research’s inability to repay the $10 billion it borrowed from the exchange. In response to similar claims, CZ had previously tweeted that no healthy business can be destroyed by a single tweet. He pointed out that Ellison’s own social media activity, specifically her offer to buy Binance’s FTT holding, was the true catalyst for FTX’s implosion.
Binance Announcement Triggered Chain Reaction
Ellison stated that Binance’s announcement of liquidation triggered a chain reaction among retail investors, causing them to sell their tokens as well. This bank-like run on the exchange left FTX with no choice but to halt withdrawals and eventually file for bankruptcy. While part of the blame was placed on Binance’s CEO, Ellison emphasized that the main reason for FTX’s collapse was Alameda Research’s failure to repay its debt to the exchange.
CZ Responds to Claims
In response to claims blaming him for FTX’s collapse, CZ tweeted back in November that no tweet alone can destroy a healthy business. He pointed out Ellison’s tweet, which was posted 16 minutes after his own, as the true cause for people dumping FTT. This tweet by Ellison served as the catalyst for FTX’s implosion, according to CZ.
Hot Take: Ellison’s Testimony at Bankman-Fried’s Trial
During the trial of FTX founder Sam Bankman-Fried, Alameda Research CEO Caroline Ellison testified and attributed part of FTX’s collapse to a tweet by Binance CEO Changpeng Zhao. She claimed that Binance’s announcement of liquidating its holdings of the FTX token triggered a chain reaction among retail investors, leading to the exchange’s downfall. However, she also acknowledged that the primary reason for FTX’s collapse was Alameda Research’s inability to repay its debt to the exchange. CZ responded by stating that no healthy business can be destroyed by a single tweet and pointed to Ellison’s own social media activity as the true catalyst for FTX’s implosion.
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