It should be noted that this is not the first time Changpen has commented on the FTX situation. In particular, on November tenth, Zhao made it clear that trading platforms should not use their own tokens as collateral, as this way they get illiquid assets.


Changpen also gave relatively obvious advice to exchanges to hold large reserves. By the way, since then, trading platforms have started publishing evidence of their own reserves. As a matter of fact, today the audit firm Mazars confirmed that Binance has bitcoins that provide 101 per cent of user funds. Which means users shouldn’t have any problems with cryptocurrency withdrawals.

Confirmation of Binance exchange’s Bitcoin holdings by Mazars

Why did the FTX crypto exchange collapse?

Zhao never fails to reiterate that the blame for the exchange’s problems should be placed on its founder. He also tweeted some unflattering comments about Sam the day before as a response to the most common misconceptions that Binance allegedly even “pushed” FTX to collapse. Apparently, Chanpen strongly disagrees with this.

The first bias is that many for some reason believe that Zhao wants to become the “saviour” of the crypto market, although it was Bancman-Fried that previously tried to acquire such a status. Here’s the relevant line from Changpen, cited by CryptoSlate.

“Changpen Zhao wants to be the saviour of crypto. Crypto doesn’t need to be saved. There is nothing wrong with the crypto industry. It is the beauty of decentralisation. We are only part of it. We want to help other good projects that may be stranded by recent events. This is in our common interest.

Binance CEO Changpen Zhao

The second narrative is that FTX has been stranded because of some third party. According to Changpen, only the management of the exchange should be blamed for what happened – it was their negligent actions that caused the disaster. However, it is worth remembering that before the bankruptcy of FTX, Binance publicly announced the sale of FTT’s native token from its reserves due to concerns about the company’s financial problems.

So Binance "pushed" FTX to collapse after all? We don't think so: if FTX was truly "on solid ground" financially, the news of the token sale would not have led to its bankruptcy. Zhao is right, and there was nothing criminal about his actions.

Binance CEO Changpen Zhao

Changpen also criticised those who still continue to vindicate Bankman-Friede’s persona, calling him “the culprit of the circumstances”. Sam knew all too well, was aware of his company’s plight and tried to hide it. Zhao continues.

Sam Bunkman-Fried promoted a narrative that portrayed me and others as the “bad guys”. This was very important to maintain the myth that he was a “hero”. Bankman-Fried is one of the greatest con men in history, he is also a master manipulator when it comes to the media and key opinion leaders.

Former FTX CEO Sam Bunkman-Fried

At the end of his track, the Binance executive also spoke out about the competition between his exchange and FTX. Here’s his rejoinder.

We are not focusing on competition because it is a waste of time and resources when the crypto industry only affects 6 per cent of the population. We want multiple exchanges, multiple blockchains, multiple wallets and so on to coexist in the ecosystem.

Zhao’s words reflect the view of most in the blockchain industry: still, many investors, lenders and ordinary FTX customers would like to see Sam behind bars as soon as possible. However, the bankruptcy trial of such a large company could be protracted, which means new details of Bankman-Fried’s activities will only be revealed for the foreseeable future.

In the meantime, the US Senate is pushing to investigate Silvergate Bank’s ties to FTX. Senators Elizabeth Warren, John Kennedy and Roger Marshall have sent a letter to Silvergate CEO Alan Lane. The politicians asked the bank for details of its relationship with FTX in response to “new and worrying allegations” about its business practices. Here’s the rejoinder.

Your bank’s involvement in transferring FTX customer funds to Alameda demonstrates the bank’s blatant failure to comply with its duty to monitor and report suspicious financial activity carried out by its customers. We are concerned about Silvergate’s role in this activity because of reports that Silvergate facilitated the transfer of FTX customer funds to Alameda.

FTX founder Sam Bankman-Fried

Silvergate’s letter gives it until 19 December to send a response. The senators believe Silvergate may be “at the heart of the wrongful transfer of billions of FTX customer funds” and those responsible should be held to account.


We believe Changpen Zhao's comments do capture the essence of what happened. Still, if FTX didn't have a multibillion dollar liquidity hole, the tweets about Binance wanting to get rid of FTT stock would not have affected the future of the platform. So the only ones to blame for the collapse of the trading giant are FTX and Alameda management.