Crypto war: Sam Bankman-Fried’s feud with Changpeng Zhao explained – the ex-FTX CEO’s fallout with the Binance tycoon caused a multibillion-dollar crisis and has seen his net worth drop by 94 per cent

In a clash between FTX’s Sam Bankman-Fried and Binance’s CEO Changpeng Zhao, Zhao won – but “SBF” doesn’t seem as bothered as you’d think. Photos: AFP, Bloomberg

Sam Bankman-Fried regrets the feud that may have cost him his crypto empire.

The former FTX CEO said that criticising Binance CEO Changpeng Zhao, known as “CZ”, “was not a good strategic move on my part”, in an interview with The New York Times on Sunday, November 13.

The clash between the two is key to understanding one of the most dramatic collapses ever in the crypto world. Let’s take a closer look …

How the feud between Changpeng Zhao and Sam Bankman-Fried started

Binance’s Changpeng Zhao was not a fan of Sam Bankman-Fried’s constant lobbying for regulation of their industry. Photo: Reuters

Zhao and Bankman-Fried started friendly: Binance, a rival cryptocurrency exchange, invested in FTX in 2019. However, the relationship soured when Bankman-Fried, 30, pushed for regulation of the crypto industry, something Zhao, 45, opposes.

The New York Times reported that Bankman-Fried used his growing influence in Washington DC to criticise Zhao in private meetings.

“I was pretty frustrated at a lot of what I saw happening, but I should’ve understood that it was not a good decision of me to express that,” Bankman-Fried told The New York Times.

Sam Bankman-Fried used his growing influence in Washington DC to criticise rival Changpeng Zhao in private meetings. Photo: Getty Images/TNS

The dispute between the two billionaires came to a head in early November when Zhao announced that Binance would sell all of its FTT holdings, a cryptocurrency created by FTX.

“We gave support before, but we won’t pretend to make love after divorce … we won’t support people who lobby against other industry players behind their backs,” Zhao tweeted.

How Chinese crypto king Changpeng Zhao lost US$77.5 billion

Their fallout caused a multibillion-dollar crisis

Changpeng Zhao, Binance’s CEO, initially agreed to buy FTX to save the company, but later pulled out. Photo: Reuters

Zhao’s move spooked the market, causing investors to flood FTX with requests to pull their funds, causing a multibillion-dollar liquidity crisis.

Binance initially agreed to buy FTX to save it from a dire financial situation but later called off the deal.

“I shouldn’t throw stones in a glass house, so I’ll hold back a bit,” Bankman-Fried told employees, according to The New York Times. “Except to say: probably they never really planned to go through with the deal.”

Signage for the FTX Arena in Florida. many now fear the repercussions of the company’s collapse. AP

FTX unsuccessfully attempted to find other investors, eventually filing for bankruptcy on November 11. At its peak, according to CNBC, the cryptocurrency exchange was worth US$32 billion.

Bankman-Fried’s not too bothered …

Sam Bankman-Fried is known for his huge curly hair, philanthropic motives and laid back attitude. Photo: AFP

Even though Bankman-Fried saw 94 per cent of his wealth evaporate in the span of a few hours, the disgraced former darling of the crypto world has apparently not lost any shut-eye over the collapse of his empire.

Sam Bankman-Fried during happier times when his FTX cryptocurrency exchange was thriving. Photo: @FTX_Official/Twitter

“You would’ve thought that I’d be getting no sleep right now, and instead, I’m getting some,” Bankman-Fried said in his interview with The New York Times three days after the filing.

Why have only 5 billionaires signed up for the Giving Pledge this year?

… but FTX executives are facing several investigations

Sam Bankman-Fried, once considered a star in the cryptocurrency world, resigned after his firm started to collapse. Photo: AFP

Bankman-Fried and other FTX executives are now facing several investigations in the US and the Bahamas for allegedly improperly using billions of dollars of FTX customer money to fund Bankman-Fried’s trading firm, Alameda Research.

But his response to The New York Times? “It could be worse,” Bankman-Fried told them.

Sam Bankman-Fried once wrote on Twitter that he mostly sleeps on a beanbag in his office. Photo: @IndustrialNBC/Twitter
Bankman-Fried famously covets his sleep. Many profiles of the former richest man under 30 noted that he kept a beanbag in his office to take power naps between meetings. Bloomberg has reported that Bankman-Fried would occasionally even delay important meetings in favour of a nap.
This article originally appeared on Business Insider
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  • Binance CEO Changpeng Zhao lost patience with Sam Bankman-Fried’s lobbying in Washington DC and, after selling all of FTX’s cryptocurrency, sparked the company’s bankruptcy
  • Bankman-Fried, known for enjoying beanbag power naps in his office, now faces a slew of investigations into misuse of customer funds – but said ‘it could be worse’