 ▲ Binance, BNB, FTX, FTT/ChatGPT-generated image |
Changpeng Zhao, the former CEO of Binance, is being credited with executing what is regarded as one of the greatest strategic moves in cryptocurrency history—an early $2.1 billion exit from FTX one year before its collapse, a decision that ultimately saved Binance from the brink of ruin.
According to crypto-focused outlet BeInCrypto on Feb. 16 (local time), Zhao decided in 2021 to sell Binance’s stake in FTX, then led by CEO Sam Bankman-Fried, and to terminate the partnership. Zhao reportedly harbored strong doubts about FTX’s management practices and regulatory approach, and the growing rift between the two industry giants became the decisive factor behind Binance’s early withdrawal.
As an early investor in FTX, Binance held a significant equity stake. However, as conflicts with FTX’s leadership deepened, Zhao made the bold decision to exit. He expressed concerns that FTX was prioritizing rapid expansion over transparency. This preemptive move later served as a shield, enabling Binance to avoid direct impact from the liquidity crisis and subsequent bankruptcy that struck FTX a year later.
Binance reportedly received approximately $2.1 billion from the stake sale, paid in Binance’s stablecoin BUSD and FTT tokens. Zhao later announced that Binance would liquidate its entire FTT holdings, a move that shocked the market. However, this announcement acted as a catalyst in exposing FTX’s fragile financial structure, ultimately contributing to a broader market reckoning.
Analysts say that under current CEO Richard Teng, Binance has managed to maintain its industry-leading position even amid heightened regulatory scrutiny, thanks in large part to Zhao’s earlier decision. While numerous crypto firms collapsed in a chain reaction following FTX’s bankruptcy, Binance’s resilience is attributed to Zhao’s foresight in recognizing early warning signs within the partnership.
Zhao’s early exit is expected to be remembered not merely as a capital withdrawal but as one of the most successful examples of risk management in crypto industry history. Market experts continue to emphasize the importance of transparent partnerships among exchanges and rigorous financial audits in the wake of the FTX debacle, with Binance’s proactive exit emerging as a model for industry survival.
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