Revealing messages between crypto leaders: Billionaire CZ issued a warning before the day of the FTX crash

Crypto billionaire CZ is concerned that what SBF is doing could send the entire crypto industry into crisis. On November 10, he sent a message in a chat with SBF and other crypto company executives saying: “Stop now, don’t do any more damage.”

FTX and the Alameda Research fund collapsed shortly after discovering an $8 billion loss in the exchange’s account. According to the New York Times, the event sparked a crypto crisis, as FTX-affiliated companies teetered on the brink of bankruptcy and left investors skeptical about the industry’s future.

The series of text messages between Mr. Zhao and Bankman-Fried shows that top leaders in the cryptocurrency industry are concerned that the situation could get worse. Besides that, it also offers a rare glimpse into the strange way the cryptocurrency industry is run.

The messages revealed by the New York Times show that crypto executives have found that the actions of one company or the fluctuation in the value of a currency can cause an entire industry to suffer. The source also said, in addition to Changpeng Zhao and Sam Bankman-Fried, the chat group has at least two other leaders, Jesse Powell, founder of Kraken exchange, and Paolo Ardoino, Tether CTO.

A week before the FTX “catastrophe” happened, the Binance CEO agreed to buy back FTX and save the company before “turning around” with his decision. In messages sent on November 10, he was quite certain that FTX would not survive and worried that it would drag down the entire industry.

Specifically, CZ accused the former FTX CEO of using his hedge fund to devalue Tether, a stablecoin designed to be valued at $1. Tether is considered one of the “backbones” of the global cryptocurrency trading system because it is often used to make transactions. Many industry experts believe that if the price of Tether falls, it will lead to a domino effect that engulfs the entire cryptocurrency industry.

However, the SBF said that the accusations of the Binance CEO were “absurd”. The FTX founder responded to the message: “ To my knowledge, transactions of that size should have no impact on the price of Tether. Almeida and I never intended to short Tether or any stablecoin .”

A Tether representative said the company ” has demonstrated resilience to attacks ” and that FTX’s actions ” do not reflect the ethos and commitment of the industry as a whole .”

According to the New York Times, before approving the deal with Binance, SBF met a senior Tether employee and asked for a billion-dollar investment to revive its exchange. However, Tether rejected this offer.

Also on November 10, crypto billionaire CZ sent a message saying that a $250,000 transaction by Alameda destabilized Tether. Transactions are displayed on the blockchain, a public place for all cryptocurrency transactions that anyone can view.

However, SBF unfazedly replied, “ What am I doing with stablecoins? Are you suggesting that a $250,000 USDT transaction could destabilize it? ”

The Binance CEO said he doesn’t think a transaction of this size could destroy Tether but it would cause problems. “ My sincere advice is to do nothing. Put on your suit, go back to Washington DC and start answering questions ,” he replied.

After that, SBF just texted back thanks for the advice.

Reference; New York Times