Binance CEO and FTX Founder's Turbulent History Unveiled in New Book
Date: 2023-10-05 Author: Dima Zakharov Categories: BUSINESS, IN WORLD
The Failed Partnership: A Glimpse into 2019
In a recently published book by Michael Lewis titled "Going Infinite: The Rise and Fall of a New Tycoon," some intriguing details about the business aspirations of Sam Bankman-Fried (SBF) and Changpeng Zhao (CZ) have come to light. It appears that back in 2019, SBF had a vision to create a futures exchange with "zero risk" capabilities and the ability to closely monitor traders' activities.
The book reveals that Bankman-Fried developed a unique liquidation model where users' positions would be automatically closed if collateral requirements were exceeded. Lewis suggests that SBF's aim was to minimize potential losses for the trading platform through this scheme.
However, at the time of discussions in 2019, Changpeng Zhao had different objectives. FTX aimed to cater to institutional investors, while Binance was primarily focused on retail clients. Michael Lewis suggests that CZ contemplated SBF's proposal for several weeks but ultimately declined, choosing to continue working on Binance's own platform.
SBF's Independent Path and the Birth of FTX
CZ's decision did not sit well with SBF. Following the rejection, he went on to establish his own exchange, FTX, although he harbored doubts about its success. Bankman-Fried candidly expressed his uncertainty, stating, "If this works, the exchange will be worth billions of dollars. However, the probability of failure is over fifty percent. I've never done marketing. I've never interacted with the media. I've never had customers. This is unlike anything I've ever done."
This was not the only instance where the paths of SBF and CZ crossed. In 2022, when FTX faced a liquidity crisis, its founder approached Binance's leadership for a potential acquisition. Yet, once again, Changpeng Zhao turned down Bankman-Fried's proposal and even labeled him as one of the greatest fraudsters in history.
Legal Proceedings Unfold
On October 3, 2023, a legal battle began surrounding fraud allegations against SBF. The U.S. Department of Justice asserted that the FTX founder would not escape accountability for his actions.
