- Binance's CEO got alarmed by Sam Bankman-Fried's crypto trading moves as FTX collapsed, per the NYT.
- Changpeng Zhao urged the FTX founder to stop, or risk destabilizing crypto — and paying for that.
As crypto exchange FTX collapsed, Binance CEO Changpeng Zhao got alarmed that its then-boss Sam Bankman-Fried was making moves that could topple the entire industry and tried to stop him, the New York Times has reported.
Zhao urged Bankman-Fried to hold off from making trades that the Binance boss believed would intensify the crypto crisis sparked by FTX's implosion, the Friday report said, citing a text messages obtained by the NYT.
"Stop now, don't cause more damage," Zhao wrote in a group chat with Bankman-Fried and other crypto executives.
"The more damage you do now, the more jail time."
In the text messages, Zhao accused FTX's sister trading arm Alameda Research of trying to drive the price of stablecoin Tether below the $1 level it's meant to be pegged at. Analysts have repeatedly warned that if Tether collapses, that would cause a wider crypto crash.
The Binance boss pointed to a $250,000 trade by Alameda that he believed was orchestrated by Bankman-Fried to depeg Tether. But the FTX founder denied the claims, calling them "absurd," the NYT reported.
"My honest advice: stop doing everything," Zhao told him in response. "Put on a suit, and go back to DC, and start to answer questions."
Representatives for Zhao and Bankman-Fried did not respond immediately to Insider's requests for comment.
Those messages were sent in early November, a day before FTX filed for Chapter 11 bankruptcy. Since then, Zhao — commonly known as "CZ" — has described Bankman-Fried as "one of the greatest fraudsters in history", joining a chorus of influential figures pointing the finger at the disgraced ex-CEO as the investigations pile up.
US federal authorities among others are examining accusations against Bankman-Fried, specifically that he intentionally mishandled billions of dollars in FTX customer funds. There are allegations the user funds were moved to Alameda.
Meanwhile, Bankman-Fried is reportedly now being investigated over allegations that Bankman-Fried manipulated the market for two cryptocurrencies in the spring. US federal prosecutors have begun a probe into whether he acted to influence the prices of TerraUSD and Luna to the advantage of FTX and Alameda, the NYT said in a separate report.