FTX Downfall: CZ’s Memoir Exposes SBF’s Bolognese Sandwich Billions Request

The dramatic collapse of the cryptocurrency exchange FTX in November 2022 sent shockwaves through the global financial landscape. Now, Binance founder Changpeng Zhao (CZ) offers a rare glimpse behind the scenes in his new memoir, revealing stunning details about FTX’s downfall and its enigmatic founder, Sam Bankman-Fried (SBF). CZ recounts a phone call during which SBF, facing the imminent implosion of his empire, casually requested “billions of dollars” with the nonchalance of “ordering a Bolognese sandwich.” From the outset, CZ candidly admits he had no genuine intention of acquiring FTX.

In his recently released book, “Freedom of Money,” CZ writes, “I had no interest in owning FTX, nor was I particularly keen on saving SBF. However, to protect users and the broader industry, we felt compelled to consider stepping in.”

He further discloses that the “non-binding Letter of Intent” signed with FTX was merely a formality, a procedural step in a process he never fully committed to:

I was very direct: we made no commitments. Our team would conduct due diligence on their financial data, and only then would we make a decision.

Alameda’s Critical Misstep

So, what truly triggered FTX’s rapid descent? Changpeng Zhao pinpoints a crucial error. In an attempt to “stabilize market confidence,” Alameda Research CEO Caroline Ellison publicly declared on social media her willingness to purchase all of Binance’s FTT platform tokens at a price of $22 each.

CZ viewed this as a fatal blunder: “She effectively revealed her hand—the floor price—to the entire world.”

The subsequent events are now legendary. Professional traders immediately seized the opportunity, aggressively shorting FTT at the $22 mark. Predictably, the price of FTT then plummeted, freefalling to $15, then $10, ultimately bottoming out at just $5. In a mere 72 hours, an astounding $6 billion in funds frantically fled FTX.

Unveiling a Clandestine “Crypto Bigwigs” Group

In his memoir, CZ also reveals for the first time the existence of a mysterious Signal messaging group called “Exchange Collaboration.” This exclusive group was established by former FTX executive Zane Tackett during the Terra/LUNA algorithmic stablecoin collapse. Its membership comprised some of the most influential figures in the crypto world, including Changpeng Zhao himself, SBF, Coinbase’s Brian Armstrong, and Kraken’s Jesse Powell.

This group later attracted significant scrutiny from investigators at the U.S. Department of Justice (DOJ) and the SEC. CZ quips in the book, “Regulators desperately tried to find any evidence of collusion or market manipulation among exchanges. But, as expected, there was absolutely no such thing.”

Weathering a $7 Billion Bank Run

The fateful day arrived on November 9, 2022, when Binance officially announced its withdrawal from the FTX acquisition. CZ writes that Binance’s own holdings of $FTT were “essentially worthless” at that point, a stark reminder of the $1.6 billion loss the company incurred during the LUNA collapse.

The dramatic implosion of the FTX empire triggered a cascading effect across the cryptocurrency market, leading to an unprecedented bank run on Binance itself. On December 14 of that year, Binance recorded a staggering $7 billion in withdrawals in a single day. Yet, at the epicenter of this storm, CZ remained remarkably calm, recalling that he was dining with friends that very evening:

I wasn’t worried at all, because all user funds were safely held in our reserves.

Indeed, less than a month later, not only did these panicked users redeposit all their funds into Binance, but many even added more.

“Freedom of Money,” released globally on April 8, is CZ’s reflective memoir. It chronicles his legendary journey building the world’s largest cryptocurrency exchange, offers profound insights into the future of financial systems, and shares his experiences navigating the complex landscape of global regulatory bodies.

A Deep Connection with Taiwan

Beyond the high-stakes corporate battles, CZ dedicates a section of his book to his deep-rooted connection with Taiwan. In February 2018, he personally visited the island to assess its regulatory environment. During his trip, he met with “Binance Angels” and then-legislator Jason Hsu, often referred to as the “Crypto Legislator.” CZ was profoundly impressed by Taiwan’s burgeoning cryptocurrency market and its regulatory framework.

The memoir also recounts a memorable incident during that trip. While dining at a street food stall with his friend and then-Binance Chief Growth Officer Ted Lin, CZ received news that he had graced the cover of Forbes magazine, even being hailed as a “Crypto Overlord.” However, in CZ’s view, such a title changed nothing—his account balance remained the same, and his daily life continued as usual. He pondered at the time, “Does Forbes saying you’re rich actually make you rich?”

Yet, it was a seemingly minor event the following day that truly offered him a moment of realization. At a political and business meeting, Jason Hsu had printed out copies of that very Forbes cover, distributing them to every attendee. CZ writes:

No one asked me to introduce myself at that meeting. From then on, I rarely had to introduce myself at most meetings. I realized then that ‘rich people’ don’t need to introduce themselves.