Caroline Ellison's testimony: Zhao Changpeng's tweet did indeed trigger the collapse of FTX

Former CEO of Alameda, Caroline Ellison, testified for the third time, admitting that while CZ's tweet "triggered" the collapse of FTX, the main reason was still that Alameda "borrowed" $10 billion from FTX and couldn't repay it.

Caroline Ellison: CZ's Tweet Did Lead to FTX Collapse

According to a report by Cointelegraph, Caroline Ellison stated that Binance CEO Changpeng Zhao CZ's tweet on November 6, 2022, claiming to liquidate FTT, did indeed lead to the collapse of FTX.

This came after Binance received $2.1 billion worth of cash BUSD and FTT in 2020 after selling back its stake in FTX to SBF.

At the time, CZ stated that he would liquidate in a way that would not affect the market and considering market conditions and limited liquidity, it was expected to take several months to complete the process.

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

Misappropriation of Customer Assets Still the Main Reason for FTX Collapse

Caroline also added:

Although CZ's tweet "contributed" to the collapse of FTX, the main reason is still Alameda borrowing $10 billion from FTX and being unable to repay.

Last year on December 6, CZ refuted this claim, emphasizing that a healthy business would not be destroyed by a single tweet. He also believed that the plummet in FTT's coin price was due to Caroline Ellison's statement of repurchasing his FTT holdings at $22.

However, based on records, the market's reaction to CZ's announcement of liquidating FTT was a crash, while Caroline's repurchase tweet caused FTT to skyrocket.

According to CZ's statement at the time, Caroline's request to repurchase FTT at "market price" was incorrect. He stated:

This is what several large traders later told me, they sold FTT after Caroline's tweet. Honestly, I didn't understand it at the time, but in retrospect, it makes sense; she's not fit to be the CEO of a hedge fund.

Review: Binance vs. FTX Feud Explained! Alameda Steps In, Zhao Liquidates FTT, SBF: Let's Make Love, Not War