Tether executives and Binance CEO Changpeng “CZ” Zhao were concerned that former FTX CEO Sam Bankman-Fried (SBF) would try to destabilize the cryptocurrency market in order to save the now-bankrupt exchange.according to reports on December 9.
Messages seen by The Wall Street Journal from a Signal group chat called “Exchange Coordination” reveal a discussion between CZ and SBF on Nov. 10 over Tether’s USDT stablecoin. Signal’s group members include Kraken co-founder Jesse Powell and Paolo Ardoino, Tether’s CTO, among others.
According to the report, CZ and other members of the group were concerned that the operations carried out by Alameda Research would focus on divesting from the stablecoin, which would have a ripple effect on cryptocurrency prices.. The Binance CEO would have faced SBF:
“Stop trying to create disparity in stablecoins. And stop doing anything. Stop now, do no more damage.”
SBF denied the claims in a statement to the WSJ.
The alleged discussion in the Signal group came a day after Binance announced that it would not bail out troubled competitor FTX, citing “reports regarding mismanaged client funds and alleged investigations by US agencies.” On Nov. 10, Tether’s Ardoino also said that the company had “no plans to invest or lend money to FTX/Alameda.”
As Cointelegraph reported, new details about the failed deal between Binance and FTX were revealed on Dec. 9. In a twitter thread, CZ se referred Bankman-Fried as a “swindler,” saying Binance exited its FTX position in July 2021 after becoming “increasingly uncomfortable with Alameda/SBF.” SBF was “unhinged” over the exchange’s withdrawalaccording to the CEO of Binance.
In response, SBF claimed that Binance “threatened to pull out at the last minute,” accusing CZ of lying about its role in the deal.
On November 11, FTX Group and nearly 130 other companies – including FTX Trading, FTX US, Under West Realm Shires Services and Alameda Research – filed for bankruptcy in the United States citing “lack of liquidity.”
Since the bankruptcy of FTX, SBF has been cited in seven class action lawsuits and numerous probes and investigations, including a market manipulation investigation by the federal prosecutor’s office.
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