“We will not pretend to make love after a divorce,” said Mr. Zhao wrote on Twitter. “We don’t support people who lobby against other players in the industry behind their backs.”
When FTX collapsed, Mr. Zhao initially agreed to buy the exchange in what would amount to a bailout. But the deal soon fell through after Binance discovered problems in the company’s finances. In a Signal group chat with Mr. Bankman-Fried and other FTX representatives, Mr. Zhao posted a short note, according to two people familiar with the matter. “Sam, I’m sorry,” he wrote, “but we can’t go through with this deal. Way too many problems. CZ.”
Mr. Bankman-Fried hurried to get new financing lined up. “I’m not allowed to throw stones in a greenhouse, so I’ll hold back a bit,” he said in a message to employees obtained by The Times. “Except to say, they probably never really intended to go through with the deal.”
Meanwhile, at a meeting with Alameda employees on Wednesday, Ms. Ellison explained what had caused the collapse, according to a person familiar with the matter. In a trembling voice, she apologized and said she had let the group down. She said Alameda had taken out loans in recent months and used the money to make venture capital investments, among other things.
Around the time the crypto market crashed this spring, Ms. Ellison explained, lenders got around to recalling those loans, the person familiar with the meeting said. But the money Alameda spent was no longer readily available, so the company used FTX customer funds to make the payments. In addition to her and Mr. Bankman-Fried, she said, two other people knew about the scheme: Mr. Singh and Mr. Wang.
The meeting was previously reported by The Wall Street Journal. Mr Singh did not respond to a request for comment and Mr Wang could not be reached. According to a person familiar with FTX’s finances, the exchange lent as much as $10 billion to Alameda.
With FTX crumbling, Mr Bankman-Fried has been “working constructively with regulators, bankruptcy officials and the company to try and do what’s best for consumers,” he said on Sunday.
