Binance chief executive Changpeng 'CZ' Zhao didn’t hold back in a CNBC’s Squark Box interview this morning.
When asked his thoughts on former investee and “friend” (that’s stretching it), CZ said: “I’m just shocked. I’m shocked that he lied to everybody.”
Asked if this year’s market rout was an inevitable shakeout of the crypto sector or the beginning of the end, CZ said: “There are fundamental technologies that we have now that we didn’t have before, so it’s definitely not a house of cards… This industry will set us back a bit, but then the industry will become healthier.”
As for regulations, Binance “very much welcomes regulations in the US,” but even though regulations could minimise some of the catastrophes encountered this year, “when a person lies, when there’s a bad player that just wants to do bad things, regulation doesn’t prevent it”.
CZ expanded on his reasons for ditching an FTX bailout deal mere hours after signing a non-binding contract.
“It was pretty clear pretty soon that the misappropriation of user funds, the user funds were gone, and at that point, it was pretty clear that he lied to his users, his investors, his (venture capital) investors, his employees,” said CZ.
With trust gone, CZ was unable to go along with a bailout, a decision that ultimately led to the total collapse of SBF’s crypto empire and widespread market contagion.
Sam Bankman-Fried lets loose on Twitter
Conversation turned to SBF’s erratic Twitter behaviour, “I don’t think he should be Tweeting,” reckons CZ, along with every other bystander.
As for SBF’s contention that his team was merely overconfident and careless, as opposed to criminally intentional, “I think it will be very very that Sam knows that he was using user funds to do trading for Alameda, and he has been probably been doing this for quite a while.
Alameda Research was SBF’s venture fund that, as it turns out, was using FTX as a funds tap to make risky, illegal trades that ultimately lost billions.
Though most around him were probably blind to this behaviour, “a small number of people in FTX probably knew”.
CZ reiterated that Binance does not use Binance’s own BNB token as collateral, a practice which proved the breaking point for SBF’s empire.
CZ denies money laundering accusations
CZ also used the programme to deny a Reuters report of an Iran-related money laundering investigation into Binance.
“That report written by Reuters is wrong. It was Reuters by a website called Currency.com,” said CZ, before accusing the website of giving Reuters access to incorrect data.
Responding to these allegations, a Currency.com spokesperson stated: "Currency.com has never paid or lobbied a media outlet to publish any article related to crypto exchange Binance," while also adding that "no part of Currency.com is owned or has ever been owned by crypto exchange FTX or any of its related entities including Alameda Research.
"Currency.com does not offer FTT tokens on its platform, the token native to FTX."
Ultimately, Binance was largely dismissive of the whole FTX enterprise.
“We never viewed FXT as a competition,” said CZ. Ouch