Changpeng Zhao, the founder of Binance, recounts in his memoir ‘Freedom of Money’ how Sam Bankman-Fried approached him with a nonchalant request for “a couple of billion dollars” during their November 2022 phone call about acquiring FTX. This occurred just before Binance’s attempt to purchase FTX fell through. Zhao expressed no interest in owning or aiding FTX, stating his motivation was solely to protect users and the industry.
Zhao signed a non-binding Letter of Intent as a formality and clarified that there was no commitment from Binance, which would review the numbers before deciding. He attributes the collapse to Alameda CEO Caroline Ellison’s public offer to purchase Binance’s FTT holdings at $22 each, aimed at market stabilization. Zhao described this action as “a fatal mistake,” noting that traders immediately shorted FTT below this price, causing its value to plummet and resulting in a $6 billion exodus from FTX within three days.
Zhao reveals the existence of ‘Exchange Collaboration,’ a Signal group established by FTX’s Zane Tackett during the Terra/LUNA crisis earlier that year. The group included prominent figures like Zhao, Bankman-Fried, Brian Armstrong of Coinbase, and Jesse Powell of Kraken. It later drew attention from DOJ and SEC investigators looking for signs of collusion or market manipulation among exchanges, which Zhao denies existed in this context.
By November 9, Binance had abandoned the deal as its FTT holdings—previously valued at $580 million—became worthless, paralleling a $1.6 billion LUNA loss six months prior. The fallout led to a bank run on Binance with $7 billion withdrawn in one day on December 14. Zhao spent that evening dining with friends, confident due to the reserves backing user funds. He notes that within a month, users had not only restored their funds but also added more.