Home » “His goal was to damage FTX” – Caroline Ellison accuses Changpeng Zhao, CEO of Binance

“His goal was to damage FTX” – Caroline Ellison accuses Changpeng Zhao, CEO of Binance

by Tim

Was Changpeng Zhao trying to profit from FTX’s collapse? That’s what Sam Bankman-Fried’s ex-girlfriend, Caroline Ellison, has claimed. What exactly is she accusing him of?

Changpeng Zhao accused of trying to harm FTX

The former CEO of Alameda Research, Caroline Ellison, came back during the FTX trial to the fall of the exchange platform. She admitted that malfeasance on their part, at the behest of Sam Bankman-Fried, had caused the collapse of the FTX nebula. But she also expressed distrust of Changpeng Zhao, whom she accused of taking advantage of the situation.

To understand what’s at stake, we need to go back to November 2022. At the time, rumours of insolvency were already circulating about Alameda Research, based in particular on a CoinDesk report. In response, Binance CEO Changpeng Zhao announced the sale of all FTTs – FTX’s native tokens – held by his platform. This was the event that precipitated FTX’s downfall.

At the time, Caroline Ellison tried to “bluff”, as she explained at the trial. She had offered to buy Binance’s FTTs at $22 a piece, in order to make Alameda Research look solvent :

The role of “CZ” in question

But that wasn’t enough. Two days later, the FTT share price collapsed, with the global consequences that we all know. Some commentators had already pointed to Changpeng Zhao’s role in the collapse, and Caroline Ellison reiterated these accusations yesterday:

Prosecutor: “You said you would buy the entire Binance FTT at $22 each.”

Ellison: “I wanted to bluff him, his goal was to hurt FTX. “

It will be remembered that Changpeng Zhao had then multiplied statements to show Binance’s solvency. He had created several emergency funds, and communicated relentlessly on the solidity of his own platform. This was the starting point for the widespread use of “reserve proofs” by exchange platforms. At the time, was this a way for Changpeng Zhao to stem the tide of panic that was then sweeping through the ecosystem, or was it a self-serving strategy? The question remains to this day

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