In his memoir,Freedom of Money, released on Tuesday, Binance founder Changpeng Zhao (CZ) offers a detailed look at the behind-the-scenes negotiations leading up to the collapse of FTX in November 2022. Zhao recounts that when Sam Bankman-Fried (SBF) called to request billions of dollars in emergency funding, his tone was as casual as if he were "ordering a bologna sandwich."
In the book, Zhao clarifies that he never had any genuine intention of acquiring FTX. He describes the non-binding Letter of Intent (LOI) he signed as a mere formality, intended only to assess whether it was possible to protect users and their assets. "I had no interest in owning FTX, and I had no interest in helping SBF, but I had to consider the interests of our users and the industry," he wrote.
A Fatal Public Offer
Zhao points to Caroline Ellison, the former CEO of Alameda Research, as the primary catalyst for FTX’s rapid disintegration. During the market turmoil, Ellison publicly offered to buy all of Binance’s FTT tokens at a price of $22. Zhao characterizes this move as a "fatal mistake."
"She essentially handed the market a floor price," Zhao wrote. That public offer quickly became a benchmark for professional traders to short FTT. As the market sell-off intensified, the price of FTT plummeted from $22, leading to $6 billion in withdrawals from the FTX platform in just 72 hours and leaving the exchange with no liquidity.
Additionally, Zhao reveals the existence of a Signal group chat called "Exchange Collaboration." Created by FTX employee Zane Tackett during the Terra/LUNA crash, the group included industry leaders such as Zhao, SBF, Coinbase CEO Brian Armstrong, and Kraken’s Jesse Powell. The group later drew scrutiny from the U.S. Department of Justice and the SEC, with outsiders questioning whether it facilitated market manipulation. Zhao firmly denies these allegations in his book, stating that there was no collusion among the group members.
By November 9, 2022, Binance officially announced it was walking away from the acquisition. Zhao writes that the FTT assets held by Binance, which were worth as much as $580 million at their peak, had become "virtually worthless" following the collapse. This occurred just six months after Binance lost $1.6 billion in the wake of the LUNA crash. The fall of FTX subsequently triggered a run on Binance, with daily withdrawals reaching as high as $7 billion.
