The revelations are coming as former FTX CEO Sam Bankman-Fried has just been arrested in the Bahamas on the orders of the US judiciary. The Wall Street Journal claims to have learned of a secret Signal group of CEOs of major trading platforms. This is denied by Jesse Powell, Kraken’s co-founder. Who to believe
Changpeng Zhao allegedly urged Sam Bankman-Fried to “pull the plug” on FTX
According to messages seen by the Wall Street Journal, there is a private Signal conversation that brings together the CEOs of major cryptocurrency exchange platforms. And it would have been active during the fall of FTX, at the beginning of last month. The conversation, dubbed “Exchange Coordination,” reportedly saw Changpeng Zhao issue a warning to Sam Bankman-Fried on November 10:
“Stop trying to depeg stablecoins. And stop doing anything. Stop now, don’t do more damage. “
The urgency of Changpeng Zhao’s request would show that the Binance CEO was genuinely concerned about the financial stability of the ecosystem, which relies heavily on stablecoins. The trades made by Alameda Research would indeed have made Zhao, and presumably other participants, fearful of a collapse of Tether USDT.
Other members of this secret signal group include Tether’s CTO, Paolo Ardoino, as well as Justin Sun (Tron) and Jesse Powell, the co-founder of the Kraken exchange platform. It should be recalled that at the time the exchange took place, the USDT had briefly fallen, which created a wave of panic within the ecosystem.
Jesse Powell denies the existence of the group
Jesse Powell reacted to the article, calling it “fake news”. He said there was no such discussion, though it was unclear whether he was referring to the group, or to the party quoted by the Wall Street Journal:
Fake news. Doubt this chat ever happened. I certainly wasn’t in the room. Likely, someone trolling the MSM. The Tether story doesn’t even make sense. The story here is that WSJ & NYT were easily duped into writing a made up story about nothing.
– Jesse Powell (@jespow) December 11, 2022
” Fake news. I have my doubts that this conversation actually happened. I certainly wasn’t in the room. “
As for Sam Bankman-Fried, he did not deny the existence of the group, but said he never wanted to influence the stablecoin prices:
“These accusations are absurd. [To my knowledge neither I nor Alameda have ever intentionally tried to cause Tether, or any other stablecoin, to lose parity with the dollar. I have made many mistakes over the past year, but not this one. “
A claim that tends to be confirmed by messages seen by the Wall Street Journal, which reports that Sam Bankman-Fried reportedly responded to Changpeng Zhao’s accusations in the Signal group:
“Do you really think $250,000 in USDT trading could really depeg him? “
Who to believe then? If this private conversation existed, the implications would of course go further than the FTX case. Such coordination would be unthinkable in traditional finance, and could open the door to new questions about competition and monopoly in the market.
