Binance’s CZ says he never shorted FTX’s crypto token—and the decision to stop selling it was ‘very expensive’

Must read

Elon Musk’s Twitter says it has good reason not to pay for $200,000 private jet trip: The company overbilled us

Twitter Inc. fired back at a private jet provider that sued over unpaid bills, saying the company overcharged for the social media giant’s head...

Elon Musk’s false ‘funding secured’ tweet caused Tesla investors ‘consequential harm’ to the tune of $12 billion, jury told

Tesla investors lost $12 billion over 10 days as a result of Elon Musk’s famous tweet in 2018 that he had “funding secured” to...

Governments need to work with the private sector to solve their trust crisis

Democracies everywhere are experiencing a trust crisis. Polling by the global public relations firm Edelman shows that from 2021 to 2023...

Air travelers would get $1,350 if bumped under proposed ‘passenger bill of rights’ that comes just weeks after Southwest Airlines’ epic meltdown

Senators who want to impose tougher penalties when U.S. airlines strand or delay passengers say they finally might be able to turn their ideas...

In 2008, a group of Wall Street traders saw the housing crash coming and decided to bet against the housing market, striking it rich in a story dramatized in the 2015 biographical film The Big Short.

A Twitter post featuring the faces behind this year’s failed crypto ventures—including SBF’s—for a movie called The Big Short 2, an imaginary sequel to the 2015 film, made the rounds over the weekend. 

But Changpeng Zhao, also known as CZ, the CEO of crypto exchange Binance, which was involved in a series of events that culminated in the bankruptcy of rival exchange FTX, replied to the post, saying that he never officially took a short position against FTX’s native currency. 

“Full disclosure: Binance never shorted FTT,” CZ wrote on Twitter on Sunday, referring to the FTT token used by FTX customers that has seen its value spiral downward over the past week. 

Last week’s FTX meltdown rocked the crypto world, as the $32 billion cryptocurrency exchange platform filed for bankruptcy and saw its assets liquidated virtually overnight. The crash has also tarnished the once-glowing reputation of FTX founder and former CEO Sam Bankman-Fried—a.k.a. SBF—who now risks going to prison for mishandling customer funds. 

Full disclosure: Binance never shorted FTT. We still have a bag of as we stopped selling FTT after SBF called me. Very expensive call. https://t.co/3A6wyFPGlm

— CZ 🔶 Binance (@cz_binance) November 14, 2022

Crypto crash

From the rubble, CZ has emerged as a clear winner, as his company Binance stands to gain the most from FTX’s collapse.

Binance’s decision to sell FTT is part of what ignited the whole crisis. Last week, a public Twitter feud between CZ and SBF ended with CZ dumping Binance’s holdings of FTT, worth around $500 million. Speaking at a conference in Indonesia last week, CZ said that the act was in response to a CoinDesk report on Nov. 2 revealing close financial ties between FTX and Alameda Research, another company founded by SBF.

When Binance dumped its tokens, it ignited the current crypto crisis by sparking a massive market selloff and $6 billion in withdrawals from FTX in under 72 hours. 

But CZ and Binance could have been even bigger winners from the fiasco. In his Twitter post, he wrote that Binance still had “a bag” of FTT before it stopped selling the token when CZ received a call from SBF. It was a “very expensive call,” according to CZ.

Binance did not immediately respond to Fortune’s request for comment on CZ’s tweet.

Last week, CZ recounted how he had issued a letter of intent to buy FTX in a bid to protect users after SBF explained the situation to him. But Binance quickly walked back the offer on Nov. 9 after it said it took a look at FTX’s books. On Nov. 11, the Wall Street Journal reported that SBF had mishandled customer funds to invest in Alameda Research, a trading firm he also helmed.

Last week, CZ warned that FTX’s collapse could lead to bigger consequences for the larger crypto sector, saying it could have “cascading effects” and comparing it to the 2008 global financial crisis.

The problems for FTX are continuing to pile up. Over the weekend, the exchange said it was investigating the loss of $662 million in “unauthorized transactions” of its tokens, which took place in the 24 hours after the company declared bankruptcy on Friday.

On Sunday, CZ announced that Binance would be halting all deposits of FTT tokens on its platform, citing the unauthorized transactions involving FTX, and advised other crypto exchanges to do the same.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

More articles

Latest article

Elon Musk’s Twitter says it has good reason not to pay for $200,000 private jet trip: The company overbilled us

Twitter Inc. fired back at a private jet provider that sued over unpaid bills, saying the company overcharged for the social media giant’s head...

Elon Musk’s false ‘funding secured’ tweet caused Tesla investors ‘consequential harm’ to the tune of $12 billion, jury told

Tesla investors lost $12 billion over 10 days as a result of Elon Musk’s famous tweet in 2018 that he had “funding secured” to...

Governments need to work with the private sector to solve their trust crisis

Democracies everywhere are experiencing a trust crisis. Polling by the global public relations firm Edelman shows that from 2021 to 2023...

Air travelers would get $1,350 if bumped under proposed ‘passenger bill of rights’ that comes just weeks after Southwest Airlines’ epic meltdown

Senators who want to impose tougher penalties when U.S. airlines strand or delay passengers say they finally might be able to turn their ideas...

How the airline industry is using A.I. to improve the entire experience of flying

When Swiss International Air Lines began to use A.I. technology to boost efficiency, the carrier was able to better optimize more than half the...