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News

Caroline Ellison: Changpeng Zhao Tweet Is The Main Cause Of FTX’s Collapse

October 13, 2023 - Around 2 mins mins to read

Key Points:

  • Caroline’s testimony reveals Binance’s alleged PR campaign against Alameda and leaked balance sheets.
  • Changpeng Zhao tweet contributed to FTX’s collapse, but the main reason was Alameda’s $10 billion debt.
According to Cointelegraph,former Alameda Research CEO Caroline Ellison testified in court about a memorandum created by FTX’s Sam Bankman-Fried (SBF) on November 6, 2022.
Caroline Ellison: Changpeng Zhao Tweet Is The Main Cause Of FTX's Collapse

Changpeng Zhao Tweet Implicated in FTX Collapse

The document listed potential investors who might seek rescue amid allegations that Binance was involved in a “public relations campaign” against Alameda and had “leaked Alameda’s balance sheet to Coindesk.”

Ellison argued that the Changpeng Zhao tweet played a role in FTX’s collapse. On November 6, 2022, Zhao announced Binance’s intention to liquidate its FTT holdings, triggering a cascade of retail investors withdrawing funds from FTX.

This withdrawal frenzy ultimately led FTX to halt withdrawals and file for bankruptcy on November 11. However, Ellison emphasized that while Changpeng Zhao tweet “contributed” to FTX’s downfall, the primary reason was Alameda’s inability to repay the $10 billion it had borrowed from the exchange.

Cryptocurrency Governance Challenges Unveiled in Testimony

Ellison also highlighted the commingling of operations between FTX and Alameda, revealing the absence of adequate internal controls and segregation systems. Between 2019 and November 2022, she considered resigning from Alameda several times.

Furthermore, Ellison testified that, despite working with various accountants between 2021 and 2022, they found themselves unable or unwilling to review Alameda’s financial records. Former FTX Digital Markets CEO Ryan Salame initially prepared Alameda’s balance sheet, but Ellison eventually took over this task.

Coincu will continue to update the situation related to Sam Bankman-Fried, you can find out more information through this article.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Binance

Caroline Ellison

Changpeng Zhao

CZ

FTX

Sam Bankman-Fried

SBF

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

Caroline Ellison: Changpeng Zhao Tweet Is The Main Cause Of FTX’s Collapse

Key Points:

  • Caroline’s testimony reveals Binance’s alleged PR campaign against Alameda and leaked balance sheets.
  • Changpeng Zhao tweet contributed to FTX’s collapse, but the main reason was Alameda’s $10 billion debt.
According to Cointelegraph,former Alameda Research CEO Caroline Ellison testified in court about a memorandum created by FTX’s Sam Bankman-Fried (SBF) on November 6, 2022.
Caroline Ellison: Changpeng Zhao Tweet Is The Main Cause Of FTX's Collapse

Changpeng Zhao Tweet Implicated in FTX Collapse

The document listed potential investors who might seek rescue amid allegations that Binance was involved in a “public relations campaign” against Alameda and had “leaked Alameda’s balance sheet to Coindesk.”

Ellison argued that the Changpeng Zhao tweet played a role in FTX’s collapse. On November 6, 2022, Zhao announced Binance’s intention to liquidate its FTT holdings, triggering a cascade of retail investors withdrawing funds from FTX.

This withdrawal frenzy ultimately led FTX to halt withdrawals and file for bankruptcy on November 11. However, Ellison emphasized that while Changpeng Zhao tweet “contributed” to FTX’s downfall, the primary reason was Alameda’s inability to repay the $10 billion it had borrowed from the exchange.

Cryptocurrency Governance Challenges Unveiled in Testimony

Ellison also highlighted the commingling of operations between FTX and Alameda, revealing the absence of adequate internal controls and segregation systems. Between 2019 and November 2022, she considered resigning from Alameda several times.

Furthermore, Ellison testified that, despite working with various accountants between 2021 and 2022, they found themselves unable or unwilling to review Alameda’s financial records. Former FTX Digital Markets CEO Ryan Salame initially prepared Alameda’s balance sheet, but Ellison eventually took over this task.

Coincu will continue to update the situation related to Sam Bankman-Fried, you can find out more information through this article.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.