The billionaire CEO of cryptocurrency exchange Binance says he is allocating $1 billion towards buying up distressed assets in hopes of keeping the battered industry afloat in the wake of the disastrous collapse of rival FTX.
Changpeng Zhao, who is known industrywide as “CZ,” told Acesparks News on Thursday that Binance, the world’s largest cryptocurrency exchange, will make another bid for bankrupt lender Voyager Digital, which filed for Chapter 11 bankruptcy protection earlier this year.
Zhao told Acesparks News that he hopes to put together a coalition of industry partners who will contribute to the fund.
“We are going with a loose approach where different industry players will contribute as they wish,” Zhao said.
The Binance chief executive said he would soon publish a blog post that would include more details about his plan to rescue the ailing cryptocurrency industry.
Zhao played a role in accelerating the demise of his rival, Sam Bankman-Fried’s FTX.
Earlier this month, Zhao pulled out of a plan to have Binance rescue FTX. Instead, he tweeted on Nov. 8 that he planned to sell off $530 million worth of an in-house digital asset created by FTX.
Zhao’s Binance was in talks to rescue FTX after it was learned that Bankman-Fried had been using customer funds to cover debts accrued by FTX’s sister analytics firm, Alameda Research, which was making risky bets.
Bankman-Fried resigned as CEO. According to court filings, FTX under Bankman-Fried was lax in its accounting practices while freely spending hundreds of millions of dollars on luxury real estate in the Bahamas for family and company executives.
Zhao said he abandoned plans to acquire FTX after it became clear that Alameda Research had liquidity issues.
During an interview with Acesparks earlier this month, Zhao condemned Bankman-Fried as a “liar.”
The Post reported that Zhao was furious with Bankman-Fried after he learned that the FTX founder trashed him behind his back when they were both attending an investor conference in Saudi Arabia last month.
“It’s not a coincidence he goes to the Middle East and comes back bankrupt,” a source with knowledge of the situation told The Post. “The trip created the unraveling of the fraud. There’s a direct causation between that marketing junket and Bankman-Fried’s downfall.”
FTX filed for Chapter 11 bankruptcy protection after a “run on the bank” during which customers tried to withdraw their deposits en masse.
Zhao told Acesparks News that he should have warned the public about FTX sooner.
“I actually reflect on the FTX situation and I kind of blame myself for tweeting that too late,” Zhao said.
“As an industry, we let FTX get too big before we started questioning some of those things.”
Additional Reporting by Lydia Moynihan