Inside Kevin O’Leary and Binance’s CZ Hot Exchange Over FTX’s Collapse

Following the demise of FTX, speculation about what might have happened has raged. Binance CEO Changpeng Zhao” CZ” and Canadian investor Kevin O’Leary have also been embroiled in a verbal brawl over their alleged involvement with FTX in the last week.

Despite the arrest of Sam Bankman-fried “SBF,” the ex-CEO of FTX, in the Bahamas on December 12, congressional hearings on the FTX debacle began as scheduled in the middle of the week. On December 14, Kevin O’Leary, accused of receiving $15 million to promote FTX despite knowing about the exchange’s fraudulent activities, testified. When Senator Pat Toomey asked why he thought FTX failed, he stated that FTX and Binance were at odds with each other, intentionally putting the other out of business. “Binance has now become a massive unregulated global monopoly. “They drove FTX out of business,” he explained.

In a subsequent interview with CNBC’s Squawk Box, O’Leary stated that he had contacted SBF prior to his arrest, seeking answers on the circumstances surrounding the collapse. According to him, SBF allegedly stated that they spent $2 to $3 billion in “off-balance-sheet funds” to buy back FTX stock from Binance in order to prevent FTX from collapsing.

As previously stated, prior to the collapse of FTX in early November, CZ tweeted that it would liquidate its entire position in FTX Token (totaling $2.1 billion) after a leaked balance sheet revealed that the majority of FTX holdings were tied up in FTT. FTT fell 94% in less than three days after the tweet, effectively bankrupting the exchange.

According to O’Leary, CZ orchestrated FTX’s demise because of poor communication. “Why in the world would a block trade, like the one by CZ, be tweeted out saying- I have $550 million worth of FTT tokens. What am I going to put on the market? – That is not how you trade. “You go out and find buyers, form a syndicate, and clear the market with a trade,” O’Leary charged. CZ responded on Thursday, calling O’Leary a liar and accusing him of making “a bunch of nonsense claims.” According to the Binance CEO, O’Leary’s decision to accept what SBF told him as the truth without digging deeper was suspicious. He also accused the 68-year-old investor of ignoring all of FTX’s “minor expenditures” and instead focusing on Binance’s sale of FTT.

“He (O’Leary) claims he didn’t know Binance was a shareholder of FTX, so he invested in FTX without looking at the cap table, but he was very specific in how he accounts for a transaction two years ago, so that’s kind of contradictory,” CZ said. “So, I think Kevin is a liar, I think he is lying about a bunch of stuff”. On Friday, O’Leary responded, claiming that CZ’s accusations were false.

However, as the war between the two businessmen continues, the crypto community is concerned about the possibility of arrests or a Madoff Clawback for funds received from FTX being imposed on the two businessmen.