Binance CEO Changpeng ‘CZ’ Zhao discusses the latest fallout from the FTX collapse and how that is expected to impact his company’s operation on ‘Varney & Co.’
The CEO of Binance, the world’s largest online exchange for cryptocurrency, took aim at FTX’s founder Sam Bankman-Fried after being accused of initiating the company's unprecedented downfall.
Binance's Changpeng Zhao commented on the accusation by spotlighting Bankman-Fried's decision to deliberately "lie" to his users, investors, employees and regulators around the world.
"I think there's definitely lying involved," Zhao said Friday on "Varney & Co." in response to FOX Business' Susan Li asking whether Bankman-Fried committed outright fraud, being blamed for FTX's downfall and claiming the former CEO was a psychopath.
"But I don't think we caused it [FTX's collapse]," he added. "We may be the last straw that broke the camel's back, but I can tweet about a different company, and they will be fine if the company itself is fine."
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Changpeng Zhao, CEO of Binance, told FOX Business that he was not the reason for FTX’s downfall but may be the “straw that broke the camel’s back.” (REUTERS/Darrin Zammit Lupi / Reuters Photos)
In early November, the CEO of Binance signed a non-binding letter of intent to purchase FTX. However, when the company finally pulled back the curtain and revealed how "chaotic" the balance sheet was, Zhao pulled out of the provisional acquisition.
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"As soon as we discovered that [Bankman-Fried] actually moved user funds without disclosing that, and basically he was lying to everyone, I said, this guy is probably going to be in a lot of trouble, most likely going to jail. I couldn't trust the data in the data room anymore," Zhao told Li. "The guy has no more to lose. He's probably already in a bad position, and he will do anything to lie to get our money in."
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Panels in both the Senate and the House are planning to hold hearings on FTX's collapse next month. The House Financial Services and Senate Banking committees plan December hearings that will examine the shocking demise of FTX under the leadership of Bankman-Fried. Zhao was invited to speak in front of the committee, but he said he declined.
"This thing is important, but I actually don't know very much about it. I made a tweet that many people think that's the last straw that broke the camel's back. But we looked at the data room for a fairly short period of time, that we don't have much information," Zhao explained.
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According to Zhao, Bankman-Fried ambiguously pushed a "very strong narrative" that Binance was involved with the Chinese government. This accusation was quickly refuted by the CEO.
"We were banned in China. We have no presence in China, no links to the Chinese Communist Party or any other government. I'm a technology geek where we just want a technology platform business that's turned into a financial services platform," Zhao continued. "There is a very strong narrative that was pushed by Sam Bankman-Fried that Binance is a Chinese company, and many people may still have this in their head just because my ethnicity, I'm Chinese."
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The sudden collapse of FTX has raised major concerns about the mysterious industry that has remained largely unregulated.
"There are bad players in all industries. [Bernie] Madoff happened in a very regulated Wall Street traditional finance industry. So these things happen. Just because there's one Madoff doesn't mean you shut down all the other banks," Zhao concluded.
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FOX Business' Megan Henney contributed to this report