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SBF Scrambles to Cowl Tracks After FTX Blowup 

Key Takeaways

  • Sam Bankman-Fried has deleted a number of tweets since he agreed to promote FTX.com to Binance yesterday.
  • A number of posts sustaining that the FTX trade was in good monetary standing have been eliminated.
  • If FTX customers can’t be made entire, these tweets may function proof towards the FTX CEO if a case is introduced towards him.

Earlier than agreeing to promote FTX.com to Binance, Sam Bankman-Fried assured his Twitter followers that the trade was in good monetary standing in a number of since-deleted tweets. Apparently, it wasn’t. 

SBF Goes to Floor

Sam Bankman-Fried is making an attempt to cowl up his current Twitter exercise. 

A number of crypto neighborhood members observed Tuesday that the FTX CEO had deleted a number of tweets from his profile following Binance’s deliberate acquisition of the trade. 

As a part of a tweet storm posted on November 7, Bankman-Fried assured his followers that his embattled trade was in good monetary standing. “FTX has sufficient to cowl all shopper holdings. We don’t make investments shopper property (even in treasuries),” he defined. “We’ve been processing all withdrawals and can proceed to be.”

Nonetheless, yesterday’s occasions have referred to as the since-deleted posts into query. A number of stories indicated that FTX stopped processing withdrawals round 14:00 UTC Tuesday. Binance CEO Changpeng “CZ” Zhao later stated that FTX was affected by a “liquidity crunch,” that means the trade didn’t have sufficient funds available to pay out clients. Bankman-Fried’s choice to delete the aforementioned tweets has ignited hypothesis that FTX didn’t have sufficient property to cowl its clients’ holdings when he posted. 

In the identical tweet storm, Bankman-Fried asserted that the FTX trade was “closely regulated” and held $1 billion in extra money. “We’ve a protracted historical past safeguarding shopper property, and that is still true at the moment,” he stated. The veracity of this assertion has additionally been disputed following Binance’s FTX.com acquisition. It stands to purpose that if FTX did certainly have $1 billion in extra money, it wouldn’t want a bailout from its largest competitor. 

One other deleted Bankman-Fried tweet of be aware is one posted in reply to co-CEO of FTX Digital Markets Ryan Salame final month. “been an absolute pleasure watching @cz_binance have the extraordinarily troublesome however transformative debates on twitter this previous week to make sure the crypto business strikes ahead in the absolute best manner,” Salame stated in a tweet on October 30. In response, Bankman-Fried posted, “excited to see him repping the business in DC going ahead! Uh, he’s allowed to go to DC, proper?”

On the time it was posted, Bankman-Fried’s response was broadly interpreted as a slight towards Zhao, whose trade drew the ire of regulators worldwide as crypto boomed final 12 months. Some have speculated that the publish served as motivation for Zhao to chop Binance’s publicity to the FTX trade’s FTT token, which finally led to FTX’s liquidity crunch and Binance buyout. Regardless, now that Zhao’s firm has signaled its intention to bail out FTX by way of an acquisition, Bankman-Fried will possible be making an attempt to cowl proof of any unhealthy blood between himself and the Binance CEO. 

Till Zhao’s FTX acquisition is finalized, clients with crypto property trapped on the trade can’t be certain their funds are secure. Though each Bankman-Fried and Zhao have publicly acknowledged their intent to guard buyer funds above all else, this will not be potential, relying on how huge a gap there may be within the FTX steadiness sheet. It’s nonetheless potential that Binance will again out of the deal following its due diligence. On this case, Bankman-Fried’s deleted tweets may function damning proof if a case towards him is dropped at courtroom. 

Disclosure: On the time of penning this piece, the writer owned ETH, BTC, and a number of other different crypto property. 

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