Sam Bankman-Fried, the struggling CEO of beleaguered cryptocurrency exchange, FTX, broke his silence on Thursday, taking to Twitter to explain and apologize for the dire situation that FTX is in, hinting at a “particular sparring partner,” adding that “well played; you won.”
In a series of tweets, Bankman-Fried admitted that he could have handled the FTX situation better, starting with “I’m sorry. That’s the biggest thing. I fucked up, and should have done better,” he tweeted.
1) I'm sorry. That's the biggest thing.
— SBF (@SBF_FTX) November 10, 2022
I fucked up, and should have done better.
“I also should have been communicating more very recently. Transparently–my hands were tied during the duration of the possible Binance deal; I wasn't particularly allowed to say much publicly. But of course, it's on me that we ended up there in the first place,” he wrote in a 22-part Twitter thread.
Over the course of the Twitter thread, Bankman-Fried explained that FTX US users are unaffected and "fine", and he is "not sure" what is going to happen moving forward.
In addition, the 30-year-old CEO attributed a big part of the collapse to the $5 billion in withdrawals made on Sunday, which was "the largest by a huge margin."
FTX – Binance Drama Not Over Yet
Towards the end of the thread, Bankman-Fried appeared to take a jibe at Binance, unsubtly referring to the world's largest crypto exchange as a "particular sparring partner" who he will have "more to say about." This suggests the FTX-Binance drama is far from over yet.
20) At some point I might have more to say about a particular sparring partner, so to speak.
— SBF (@SBF_FTX) November 10, 2022
But you know, glass houses. So for now, all I'll say is:
well played; you won.
The comments came as Binance pulled out of the dealon Wednesday to acquire the non-US operations of FTX following the latter’s liquidity crisis.
The company cited the state of FTX’s corporate due diligence, “latest news reports regarding mishandled customer funds,” and “alleged US agency investigations” for the move. However, the company also noted in the same tweet that “outliers that misuse user funds will be weeded out by the free market.”
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
The comments appear to be a continuation of the supposed ‘tension’ between Bankman-Fried and Binance CEO, Changpeng Zhao. Recall that before Binance initially agreed to acquire FTX, Zhao last Sunday announced that his exchange would be withdrawing “the remainder of its $530 million FTX Tokens (FTT) due to recent revelations that have come to light."
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Industry analysts believe that the move by Binance, in addition to the revelation that FTT was the single biggest asset on Alameda’s balance sheet, contributed to the liquidity crisis that engulfed FTX. Zhao, later that Sunday, described the decision as a “post-exit risk management,” adding that the exchange “won’t support people who lobby against other industry players behind their backs.”
Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.
— CZ 🔶 Binance (@cz_binance) November 6, 2022
On Monday, Bankman-Fried responded, writing about a “competitor” that was “trying to go after us with false rumors” in a now deleted post. He added that FTX “had enough to cover all client holdings” in another part of the Twitter thread. “We don’t invest client assets (even in treasures). We have been processing all withdrawals, and will continue to be [sic].”
He continued "FTX has enough to cover all client holdings. We don't invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be."
‘Not a Win’
However, in between these subtle jabs, the rival CEOs sometimes put up a cooperative front. While announcing Binance’s proposed takeover on Tuesday, Bankman-Fried described Binance as committed to “a more decentralized global economy,” adding that “we are in the best of hands.”
5) I know that there have been rumors in media of conflict between our two exchanges, however, Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands.
— SBF (@SBF_FTX) November 8, 2022
Also, before Binance pulled out of the deal, Zhao shared a note on Wednesday sent by the exchange to all its teams across the world.
In the note, Zhao noted that his exchange “did not master plan” the fallout or “anything related to it” that FTX was experiencing. He also urged his team not to view FTX’s situation as a “win for us”, adding that “user confidence is severely shaken.”
“Regulators will scrutinize exchanges even more. Licenses around the globe will be harder to get. And people now think we are the biggest and will attack us more,” he explained.
In the spirit of transparency, might as well share the actual note, sent to all Binance team globally a few hours ago.https://t.co/IUNkPcLC8T pic.twitter.com/XGlIJB7EV5
— CZ 🔶 Binance (@cz_binance) November 9, 2022
What's Next?
With Bankman-Fried now scrabbling around to find a way to save his crumbling crypto empire, there are many questions about the conduct of FTX that remain unanswered as well as new questions emerging on a daily basis.
As new details emerge and rumours of wrongdoing persist, what is known, is that this drama is far from over yet.
