SBF tried to destabilize crypto market to save FTX, as per report

SBF has been involved in several market manipulation investigations by federal prosecutors.

Trades made by Alameda Research were reportedly focusing on depeg Tether’s stablecoin.

In addition to being named in seven class action lawsuits and numerous investigations and probes, SBF has been involved in several market manipulation investigations by federal prosecutors.

According to a report on Dec. 9, executives of Tether and Binance CEO Changpeng “CZ” Zhao were worried that Sam Bankman-Fried (SBF), former FTX CEO, was trying to destabilize the crypto market to save the now-bankrupt exchange.

A message from a Signal group chat named “Exchange coordination” seen by The Wall Street Journal on Nov. 10 shows an argument between CZ and SBF over Tether’s stablecoin Tether.

According to the study, CZ and others were concerned that Alameda’s trades were concentrating on depegging the stablecoin, which would have had a significant ripple effect in cryptocurrency prices. The Binance CEO allegedly confronted SBF:

The Signal group consists of Kraken co-founder Jesse Powell, Paolo Ardoino, chief technology officer of Tether, among others. SBF denied the accusations in a statement to the WSJ.

On Nov. 10, Binance said it would not bail out its troubled competitor FTX, citing “reported mishandled customer funds and US agency investigations.” The following day, Tether’s Ardoino also said the company has no “plans to invest or lend money to FTX/Alameda.”

we reported that new details about the failed agreement between Binance and FTX were revealed on Dec. 9. In a tweet, CZ referred to Bankman-Fried as a “fraudster,” saying Binance exited its position in FTX in July 2021 after becoming “increasingly uncomfortable with Alameda/SBF.” According to Binance’s CEO, SBF was “unhinged” at the exchange pulling out, which led to an “increasingly uncomfortable” feeling for Binance.

SBF said that Binance threatened to walk at the last minute, alleging CZ of lying about his role in the deal.

On Nov 11, FTX Group and about 130 firms, including FTX Trading, FTX US, under West Realm Shires Services and Alameda Research, filed for bankruptcy in the United States citing a “liquidity crunch.”

FTX filed for bankruptcy in 2016 and, since then, SBF has been the subject of seven class action suits and numerous investigations and prosecutions, including a market-rigging probe by federal authorities.