The downfall of cryptocurrency exchange FTX has been partially attributed to a tweet by Binance CEO Changpeng “CZ” Zhao, according to former Alameda Research CEO Caroline Ellison.
According to former Alameda Research CEO Ellison testified in Sam “SBF” Bankman-Fried’s criminal trial that CZ’s tweet played a role in the demise of FTX. The tweet announced Binance’s decision to liquidate its FTX Token (FTT) holdings, which reportedly prompted retail investors to withdraw funds from FTX.
The rush of withdrawals led to FTX temporarily halting transactions and filing for bankruptcy on Nov. 11. However, Ellison claimed that the key issue was Alameda’s inability to repay a $10 billion loan from the exchange.
CZ disputed the accusations, arguing that no robust business could be ruined by a single social media post. He suggested that Ellison’s own tweet offering to buy Binance’s FTT was the primary cause of the token’s value plunge.
Ellison has pleaded guilty as part of a deal with U.S. authorities and is currently testifying against Bankman-Fried, who has pleaded not guilty to seven criminal charges. The trial is expected to continue through November.
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