Binance Founder Changpeng Zhao Reveals Details of Failed FTX Acquisition Attempt

Changpeng Zhao, the founder of Binance, recently shared insights into the failed attempt to acquire FTX in November 2022. In his memoir, Freedom of Money, Zhao recounts how FTX’s Sam Bankman-Fried casually asked him for “a couple of billion dollars” during a phone call, leading to the non-binding Letter of Intent signed by Binance. However, Zhao clarifies that he never had any intention of going through with the acquisition, stating, “I didn’t have any interest in owning FTX.”

The collapse of the deal was attributed to a public offer made by Alameda CEO Caroline Ellison to buy Binance’s FTT holdings at $22 each, inadvertently revealing a floor price that led to professional traders shorting FTT and causing a significant drop in value. Within 72 hours, $6 billion had exited FTX, resulting in Binance walking away from the deal on Nov. 9.

Zhao also sheds light on the “Exchange Collaboration” Signal group, which included key industry players like Brian Armstrong of Coinbase and Jesse Powell of Kraken. The group faced scrutiny from regulatory authorities but Zhao maintains that there was no collusion or market manipulation involved.

Following the failed acquisition, Binance experienced a bank run with $7 billion withdrawn in a single day on Dec. 14. Zhao remained unfazed, confident in the reserves holding all user funds. Within a month, users had redeposited the withdrawn funds and more, restoring confidence in the platform.

Despite the challenges faced during the FTX acquisition attempt and subsequent fallout, Zhao’s transparency and strategic decision-making ultimately reinforced Binance’s position in the industry.