CZ Turned Down SBF $40 Million Request To Build an Exchange

Binance CEO, Changpeng “CZ” Zhao, did not agree to give $40 million to the former FTX CEO Sam Bankman-Fried (SBF) for building a special kind of crypto trading place, says Michael Lewis’ book “Going Infinite: The Rise and Fall of a New Tycoon.”

SBF suggested making a futures exchange, a place where people can trade with money they do not have yet, promising it would have “zero risk” of losing money from bad trades. His idea was to watch trades closely and stop them if they were going to lose too much money. Futures exchanges can be risky because crypto prices can change very quickly.

Binance and FTX, two big crypto trading places, had different ideas in 2019. FTX wanted to work more with big investors, while Binance wanted to help regular people buy and sell crypto. CZ thought about SBF’s idea but chose not to give him money. Instead, Binance made their own futures platform without FTX.

SBF was not happy with CZ’s choice and said some mean words about him. Even though SBF and his FTX team built their futures exchange in 2019, they were not sure it would work because it was so different from what they had done before. SBF said, “If it works it is worth billions of dollars, but I thought there was a better than fifty percent chance it wouldn’t work.”

Later, in 2022, FTX faced big money problems and asked Binance to buy them, but CZ said no, thinking FTX could not be saved.