CZ’s Infamous FTT Tweet in 2022 Could Cost Binance $1.8 Billion (Says FTX’s New Lawsuit)

Oh, how the turntables (as Michael Scott famously said). The same guy who blew the whistle on FTX’s house of cards now finds himself in the legal hot seat (again, for like the 10th time). 

Yes, Changpeng Zhao, better known as “CZ,” the former CEO of Binance, has FTX coming after him for $1.8 billion. FTX claims CZ and Binance were in on a "fraudulent" deal with Sam Bankman-Fried, FTX's co-founder, who's now bunking with orange jumpsuits and reportedly trading rice with his fellow prisoners (once a gambler, always a gambler right?).

(Source: New York Post)

So here’s the deal (and boy, is it shady). Back in July 2021, CZ and his Binance buddies made a swift $1.8 billion exit, selling their stake in FTX’s international and U.S. entities. The buyback involved FTX tokens (FTT), Binance’s tokens (BNB), and a sprinkle of Binance’s stablecoin (BUSD) for good measure. According to FTX’s estate, this was more of a Ponzi move than a proper payout. Turns out, FTX claims, they were the ones who weren’t financially stable.

By early 2021, FTX was allegedly already broke (maybe from all those polygamous raunch parties from their Bahama mansion?). So, why did they proceed with a $1.8 billion buyback? FTX’s new legal team is basically saying CZ and Binance saw the writing on the wall but thought, “Eh, let’s cash out anyway.” In lawyer-speak, they’re calling this deal a “constructive fraudulent transfer” (which roughly translates to “we’re going to need that money back, stat”). But Binance isn’t rolling over. They’ve labeled FTX’s claims as “meritless,” vowing to “vigorously defend” themselves. Translation: brace yourself for a legal slugfest that’ll likely last longer than any crypto bull run.

In addition to FTX’s estate coming for a billion-dollar payda… they’re also fuming over CZ’s Twitter escapades. They allege that on November 6, 2022, CZ’s infamous tweet about Binance liquidating its FTT holdings triggered a bank run at FTX. 

CZ, in what FTX describes as a “totally-not-sus” move, called it “post-exit risk management” and threw in a “learning from LUNA” quip for good measure. Days after CZ called Sam’s bluff via tweet, FTX collapsed, and Bankman-Fried was fast-tracked to his new gig as an inmate (and reportedly sharing a jail cell with Diddy).

FTX claims CZ’s tweet was “false, misleading, and fraudulent,” designed to push FTX over the edge (and right into the flames). But CZ didn’t just stop there. He practically live-tweeted FTX’s downfall with all the subtlety of a WWE commentator, watching gleefully as FTX imploded, and positioning Binance as the “last exchange standing” (cue the villainous laughter).

If you don’t know much about the crypto community (congratulations, you are probably doing well) FTX and Binance were once allies, with Binance holding a nice chunk of FTX’s equity. But as FTX’s star rose, their love turned sour, and CZ was more than happy to cash out in 2021. Now, FTX’s estate says the exit deal was all smoke and mirrors.

Of course, Sam Bankman-Fried has since earned the title of “biggest fraudster in history” (congrats, Sam—you’re now the Michael Jordan of financial scandals, outscoring Ponzi, Madoff, and a century of other con artists). He’s currently serving 25 years for fraud, so let’s just say his reputation is… well, as trashed as FTX’s creditors’ hopes of seeing their money again. 

(Source: Getty Images)

Now, it seems CZ’s tasting his own medicine, with FTX’s estate arguing that Binance knowingly cashed in on FTX’s shady finances (because, sure, if your buddy’s house is on fire, you’re the bad guy for taking your couch back). But hey, when $1.8 billion’s on the line, everything looks a little suspicious, right?

PS: A new trade alert is dropping any moment, so keep your eyes open and coffee strong. If you’ve been taking a nap lately, you should know that our last official trade alert squeezed 116% minutes after sending it to our Stocks.News members.  And we’ve been on a heater like prime Larry Bird, consistently dishing out at least one 100%+ winner every single week since we kicked this off.

Now, I won’t hit you with any of those 'used-car-salesman' pitches. No gimmicks, no “best kept secrets.” Just the facts: it's entirely up to you if you want in on the next rocket before it takes off. If you're game, click here to see how you can join the Stocks.News family… Spoiler alert: you won’t be coughing up what those gurus charge for their bs AI systems.

Stock.News does not have positions in companies mentioned.