Million

Rise

In Michael Lewis’s latest book, “Going Infinite: The Rise and Fall of a New Tycoon,” a fascinating chapter unfolds, shedding light on a pivotal moment in the crypto world. Back in March 2019, Binance CEO Changpeng “CZ” Zhao rejected a $40 million proposal from former FTX CEO Sam Bankman-Fried (SBF) for a futures crypto exchange. This decision marked the beginning of a divergence in their paths, driven by contrasting objectives.
The book<a href="https://www.washingtonpost.com/books/2023/10/03/michael-lewis-sam-bankman-fried/" rel="noopener noreferrer nofollow" target="_blank"> reveals</a> that SBF had an audacious plan to create a futures exchange with “zero risk” for bad trades with high leverage. Unlike traditional futures exchanges that often require traders to increase collateral when trades go awry, SBF’s vision aimed to mitigate potential losses for the exchange. In the volatile crypto market, rapid price swings can lead to bad debts, making SBF’s approach all the more innovative.
At the time of SBF’s proposal, Binance and FTX had distinct objectives. FTX was eager to cater to institutional investors, while Binance was primarily focused on serving retail customers. This divergence in goals played a pivotal role in CZ’s decision-making process.
<h2 class="wp-block-heading" id="cz-s-rejection-and-the-fallout">CZ’s rejection and the fallout</h2>
After contemplating SBF’s proposal for several weeks, CZ made the decisive call to decline the $40 million request for funding. Instead, Binance chose to develop its in-house futures platform. The book suggests that SBF didn’t take this rejection lightly and reportedly referred to CZ as a “douche” for his decision. This rejection marked a turning point in the relationship between the two crypto tycoons.
With the funding from Binance out of the picture, FTX decided to forge its own path and launched its<a href="https://www.cryptopolitan.com/going-infinite-leaks-what-happened-jump-trading-and-virtu-financial-ftx-scandal/" rel="noopener noreferrer nofollow"> FTX </a>futures exchange in 2019. However, uncertainty loomed over this venture. SBF admitted, “If it works it is worth billions of dollars, but I thought there was a better than fifty percent chance it wouldn’t work.” This endeavor was a departure from anything SBF had done before, with marketing, media interactions, and customer relations posing new challenges.
Fast forward to 2022, when FTX faced a liquidity crisis, the exchange reached out to Binance once again for a potential acquisition. However, CZ declined, asserting that the platform was beyond redemption. This incident further highlights the complex relationship between the two crypto giants.
These revelations come at a significant juncture as SBF faces a trial in New York, where he is confronted with multiple charges of fraud and money laundering linked to the collapse of FTX.

Binance CEO CZ’s Refusal of FTX’s $40 Million Proposal Revealed in Latest Book

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