Binance CEO Changpeng Zhao Says Sam Bankman-Fried ‘Clearly’ Lied to FTX Users, Investors and Employees

Binance CEO Changpeng Zhao is unveiling more details about the call he had with Sam Bankman-Fried as the FTX founder scrambled to rescue his ailing crypto exchange.

In a new CNBC interview, Changpeng Zhao says that he received a call from Bankman-Fried within 48 hours after tweeting his firm’s plans to liquidate its FTT holdings.

“At the beginning, I thought he just wanted to do an OTC (over-the-counter) deal to buy out the FTT tokens we had. And then he actually wanted a buyout of the entire firm, of the entire FTX platform. We got a team on it. It was pretty clear pretty soon that there’s a misappropriation of user funds. The user funds are gone. At that point, it’s clearly that he lied to his users, his investors, his VC (venture capital investors), his employees. At that point, whatever data that’s in the data room, we couldn’t trust anymore.

It was quite hard for us to do that due diligence. We didn’t go very far.”

The Binance executive also says that it is very likely that only Bankman-Fried’s inner circle knew about what was really happening in FTX.

“I didn’t do the due diligence myself but I think [it’s] very, very clear that Sam [Bankman-Fried] knows he was using user funds to do trading for Alameda and he was probably doing this for quite a while and that nobody else knew until very recently. Only a small number of people in FTX probably knew. But most of the other normal employees probably did not know. I think that’s probably the most likely situation.” 

Last week, new FTX CEO John Ray said that the company’s top brass was made up of “potentially compromised individuals” and that most of FTX’s employees were unaware of the company’s ailing financial situation.

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