In his new memoir, Changpeng Zhao reveals that he signed the agreement letter with FTX merely as a formality and called the floor price of $22 that Caroline Ellison proposed a "fatal mistake."

Binance founder Changpeng Zhao (CZ) stated that Sam Bankman-Fried casually asked him for "a few billion dollars, as if he were asking for a sandwich" during the call before Binance attempted to acquire FTX in November 2022, and that he never intended to make that deal.

“I have no interest in owning FTX. I also do not care much about helping SBF,” Zhao wrote in the memoir “ Financial Freedom ” released on Tuesday. “But we may have to intervene to protect users and this industry.” He stated that he signed a non-binding letter of intent that was merely formal: “I made it clear that we are not making any commitments. Our team will only assess the numbers and then decide.”

Regarding the collapse, Zhao clarified the reasons leading to this situation. When Alameda's CEO, Caroline Ellison, publicly proposed to buy back the FTT that Binance was holding for $22 each - an effort to stabilize the market - Zhao believed she had "made a fatal mistake."

"She just revealed her floor price," he wrote. Professional traders immediately short-sold FTT through that price. The token dropped to $15, then $10, then $5. Within 72 hours, $6 billion had left FTX.

Zhao also revealed the existence of "Exchange Collaboration," a group on Signal established by Zane Tackett of FTX during the collapse of Terra/LUNA earlier that year, including Zhao, Bankman-Fried, Brian Armstrong of Coinbase, Jesse Powell of Kraken, and others. This group later attracted the attention of investigators from the Department of Justice and the Securities and Exchange Commission (SEC). "They were very keen to find any signs of collusion or market manipulation among exchanges," Zhao wrote. "Of course, in this case, there was none."

By November 9, Binance had withdrawn from the agreement. According to Zhao, the FTT that Binance held - once valued at a peak of $580 million - had become "essentially worthless," repeating the company's $1.6 billion failure with LUNA six months earlier.

As a result, there was a massive withdrawal from Binance, with $7 billion withdrawn in just one day on December 14. Zhao said he had dinner with friends that night. "I am not worried," he wrote. "All user funds are in our reserves." He stated that within a month, users had deposited back all of that money - and even more.