FTX: Binance CEO’s Tweet Partly Responsible for FTX’s Collapse, Says Former Alameda Research CEO

Former Alameda CEO Caroline Ellison testified Wednesday that a tweet from Binance’s Changpeng Zhao helped trigger crypto exchange FTX’s implosion.
Caroline Ellison

In testimony on Wednesday, former Alameda CEO Caroline Ellison claimed that a tweet from Changpeng Zhao of Binance was a contributing factor in the collapse of the FTX cryptocurrency exchange.

Ellison put the sale of Binance’s FTX Token holdings on a tweet sent on November 6th.

According to Ellison, the retail investor run on FTX that was fatal was sparked by the liquidation advisory. She argued that Alameda’s illicit borrowing of $10 billion from FTX was the main cause, though.

Following the outflow of customers, FTX stopped withdrawals on November 11 and declared bankruptcy. CZ has in the past denied that his tweet alone was the cause of FTX’s demise, claiming liquidity concerns.

On the seventh day of the criminal trial for Sam Bankman-Fried, Ellison also gave compelling testimony. She agreed to a plea agreement in exchange for helping the prosecution and confessing to misusing FTX customer monies.

The former CEO of Alameda also asserted that SBF sought out Saudi financiers and aspired to become US president. She acknowledged giving creditors false financial information.

Ellison acknowledged during cross-examination that SBF could not have been aware of specifics regarding Alameda’s FTX loans. Prosecutors, however, disputed that claim as being ambiguous.

Her comments have given us a behind-the-scenes look at dubious tactics used as FTX gained notoriety. Ellison’s testimony is ongoing as the prosecution works to establish that SBF deceived investors prior to FTX’s shocking collapse.

SBF has denied the accusations of fraud and conspiracy. According to Ellison, despite FTX’s rapid ascent, reckless moves had already killed the company, even though CZ’s remark may have added fuel.

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