Daily Insider: Hard times for crypto as Zhao drama bites

Almost a year to the date after Sam Bankman-Fried’s FTX imploded following revelations of a multi-billion hole in its balance sheet, the cryptocurrency drama took another turn yesterday.

Early on Wednesday, news broke that Binance CEO Changpeng Zhao (CZ) stepped down and pleaded guilty to breaking US anti-money laundering laws as part of a $4.3bn settlement.

The twist in this tale is almost Shakespearean in nature as it was CZ who first sparked a run FTX last year.

Who can ever forget CZ’s famous tweet on November 6 last year where he disclosed that Binance would liquidate its holdings of FTX’s token FTT owing to “recent revelations”. This was after he initially expressed interest in helping to possibly assist FTX in its woes.

As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4

— CZ ? Binance (@cz_binance) November 6, 2022

The dominoes then fell and SBF, today, is a convicted fraudster. Famous author and journalist, Michael Lewis, has also recently published a book on SBF entitled “Going Infinite: The Rise and Fall of a New Tycoon”, which looks to be a must-read on the psychology of the crypto space.

CZ’s story couldn’t be more different from SBF’s, but the interplay and his subsequent fall mean that business book authors could be quite busy in the months to come.

In the meantime, one has to ask whether this is the maturing of the crypto industry or just another example of how these digital assets are still just too risky to touch.