What Really Happened Between Binance And Ftx? Cz Finally Tells His Side

What Happened

Eventually, in late 2019, Binance agreed to invest.

“Yeah… we invested in them only 20% as equity at some point, and then we exited a year… later… we didn’t stay there for very long,” CZ said.

He remained a passive investor throughout the relationship

“Because of the competitive nature in the businesses… I never really… ask them for financial statements… I’m a very passive investor. So when I invest, I don’t get involved in their business,” he said.

Market Context

“Uh, I think I first met him in January 2019 in one of the Singapore conferences Binance organized. I think FTX did not exist at the time… Sam… was running Alameda,” CZ said, recalling that Alameda was then a major trading client on Binance and relations were initially friendly.

By early 2021, FTX was raising capital at valuations reportedly reaching $32 billion. CZ said Binance had contractual veto rights over future funding rounds but chose not to exercise them.

FTX ultimately failed after revelations that customer funds had been misused to cover losses at Alameda Research, triggering a liquidity crisis and bankruptcy.

Why It Matters

While CZ said he attempted to maintain a cooperative tone publicly and even agreed to appear jointly at industry events, he suggested the rivalry was already intensifying behind the scenes.

Details

The relationship between Binance and FTX has long been one of the most debated rivalries in crypto. Now, Changpeng Zhao (CZ) is offering one of his most detailed public accounts yet.

CZ describes how cooperation turned into competition well before FTX’s 2022 collapse.

CZ Lifts the Curtain on Binance’s Secretive Break With FTX

Speaking on the All-In Podcast, the former Binance CEO traced the relationship back to early 2019, when he first met Sam Bankman-Fried (SBF), then running Alameda Research.

According to CZ, Alameda and the future FTX team soon approached Binance with proposals to collaborate on a derivatives platform. Several offers were made over time, including a joint venture structure that would have favored Binance.

The deal included a token swap involving BNB and FTT, and Binance became a minority shareholder. CZ emphasized that:

Chose not to request financial statements because both firms operated competing futures businesses.

Binance-FTX Tensions Beneath the Surface

Despite the early cooperation, CZ said relations deteriorated quickly. Reportedly, he began hearing reports that SBF was criticizing Binance in policy and regulatory circles in Washington.

“And then almost as soon as we did that deal, I kept hearing from my friends… SBF badmouthing us in the Washington circles,” CZ said.

He also described frustration over hiring practices, alleging that FTX recruited Binance staff by offering dramatically higher salaries. Allegedly, FTX would then use those hires to approach Binance’s VIP clients with competing offers.

Why Binance Exited

“So… we said… why don’t we exit, actually?” CZ recalled, explaining that Binance preferred to compete freely rather than remain a shareholder in a fast-growing rival.

The exit was finalized in July 2021, roughly a year and a half before FTX collapsed in November 2022.

“This is like a full year and a half before they had issues… at the time we didn’t know,” he said, rejecting claims that Binance exited because of inside knowledge. “That’s categorically not true.”

FTX Collapse and Its Aftermath