Binance CEO slams Sam Bankman-Fried’s erratic behavior

Binance CEO: It was clear that FTX was embezzling user funds and lying to investors

The chief executive of the largest online cryptocurrency exchange, Binance, has slammed the former CEO of bankrupt exchange FTX and targeted economist Nouriel Roubini.

Changpeng Zhao, known as “CZ,” appeared at the Milken Institute’s Middle East and Africa Summit on Thursday and was asked to respond to a tweet by Sam Bankman-Fried, in which he referred to a “sparring partner,” from who is widely believed to be CZ.

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“When he tweets about a sparring partner, his house is on fire and all of this is happening, he loses focus. I didn’t know this problem existed in FTX beforehand, otherwise we would have sold these FTT tokens a long time ago,” he told CNBC’s Dan Murphy.

“The day he tweeted that, he should have been working on other things. He shouldn’t be tweeting.”

Zhao also added details about Binance’s decision on 9/11 to pull out of a deal to save rival exchange FTX.

“To be perfectly clear [Bankman-Fried] came to me. When he came to me, I knew he was desperate. So a few people probably passed the deal ahead of us,” Zhao said Thursday.

“It didn’t take us long to find out that there are much bigger problems [at FTX] than we imagined,” he added.

Binance co-founder and CEO Changpeng Zhao has given several interviews discussing the prospects for the cryptocurrency after a turbulent few weeks in the market.

NurPhoto / Contributor / Getty Images

When asked if he thought the former FTX CEO was a criminal, Zhao said he would leave that judgment to other people, but said: “[knew] there were lies and misappropriation of people’s funds,” which he called “fraud.”

In a separate interview with CNBC’s Squawk Box on Thursday, Zhao said he was “very shocked” to learn of Bankman-Fried’s conduct.

“I’m shocked he lied to everyone. I didn’t know he lied to everyone until a week ago,” Zhao said.

CNBC has reached out to FTX and Bankman-Fried for a response to the comments, but has not yet received a response.

Binance CEO: Didn't know he and FTX CEO are 'sparring partners'

Economist Nouriel Roubini also came up during the interview after describing Changpeng Zhao as one of the “seven Cs of cryptography” — an unflattering list that also included “covert, corrupt crooks, criminals, scammers, carnival hooters.”

Roubini described crypto and some of its key players as an “ecosystem that is utterly corrupt” at an Abu Dhabi Finance Week event on Wednesday.

Zhao’s response to the criticism was simple: “We don’t care,” he told CNBC on Thursday.

“Negative energy doesn’t get far in life and these people will generally stay poor,” he said, implying that Roubini was “very rude” and someone who “didn’t know local customs.”

In response to a request for comment, Roubini told CNBC two tweets In it, he criticized Binance and Zhao for allowing Iranian firms to process $8 billion worth of transactions despite US sanctions. Binance said at the time that it froze transactions when it became aware of the issue.

Binance CEO responds to Nouriel Roubini's comments

CEO Zhao has had a busy week speaking, saying on Wednesday that the cryptocurrency “will be fine” after announcing plans for a recovery fund for people going through a rough patch in the industry.

“We want the strong industry players today to protect the good industry players who may only be hurt in the short term,” said Zhao, also speaking from Abu Dhabi.

The cryptocurrency took the spotlight this week after FTX filed for bankruptcy on Friday and Bitcoin’s price fell below $17,000 for the first time since 2020.

The events also sparked concerns that the so-called crypto contagion could lead to the demise of other big industry names like Crypto.com. The company’s CEO denied the claims, saying the platform was “conducting business as usual.”

“There is a lot of pain in the short term, but in the long term it accelerates the efforts we are making to make this industry healthier,” Zhao said Wednesday.

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