Binance exec says ‘it was like a bomb went off’ at FTX, compares Bankman-Fried to Madoff and Elizabeth Holmes
Binance’s chief strategy officer said it took his company two hours of due diligence on FTX to determine that Sam Bankman-Fried’s crypto exchange was beyond saving.
“It was like a bomb went off in that place,” Patrick Hillmann, Binance CSO, told CNBC on Thursday. “You know, we’re getting on calls, people are crying. … It was complete pandemonium over there,” Hillmann said, adding that when “Sam went completely silent on them, the entire organization just fell to pieces.”
FTX’s spectacular collapse last week was first made apparent when Binance, the world’s largest exchange for cryptocurrencies, said on Nov. 8 that it signed a nonbinding agreement to acquire its smaller rival for an undisclosed sum. FTX was in the midst of a liquidity crunch, with customers demanding billions of dollars in withdrawals a day. It was money that FTX didn’t have, because it was using client deposits for other purposes.
Binance technically had 30 days to explore a deal, but the next day it backed out of the rescue plan, saying in a statement that FTX’s “issues are beyond our control or ability to help.” As one of FTX’s first investors, Binance knew the company well.
“Somehow they were always spending more and more and more and more money,” Hillmann said. “We never understood where the money was coming from. It just never made any sense to us.”
FTX’s lavish expenses included a $135 million deal for the naming rights to the arena of the NBA’s Miami Heat, a Super Bowl ad featuring comedian Larry David and sponsorship of Formula One.
“For us, if there’s smoke there’s probably fire,” Hillmann said. “I don’t think we ever even could have come close to realizing exactly how hot the fire was burning inside.”
Hillmann said lawmakers and venture capitalists were apparently drawn in by Bankman-Fried’s persona and appearance of credibility. He said the FTX founder was either like Theranos’ Elizabeth Holmes, who Hillmann said was “completely delusional,” or Bernie Madoff, who was “manipulative” and created a “cult of personality.”
“There’s no middle ground,” Hillmann said. “It’s one of the two.”
CNBC reached out to FTX, which had no response to Binance’s accusations. Bankman-Fried, who resigned from the company and was replaced as CEO by restructuring expert John Ray III, says he’s still trying to reach a financing deal in a way that can help depositors.
Ray, who was in charge of restructuring Enron, slammed FTX Thursday morning in a filing with the U.S. Bankruptcy Court for the District of Delaware, saying in his 40 years in the business he’s never seen “such a complete failure of corporate controls.” FTX said Bankman-Fried no longer speaks for the company.
Hillmann said that early on there were some concerns with FTX and its unsavory relationship with Alameda Research, Bankman-Fried’s hedge fund. However, the company had raised money at a $32 billion valuation from prominent investors, and Bankman-Fried made multiple trips to Washington, D.C., to testify in front of lawmakers. He was also a major contributor to Democratic political campaigns, while another executive, Ryan Salame, was a big Republican donor.
“We would just assume that because the scale and level of engagement they have with some of the most powerful people on this planet, that those checks and balances just naturally have to be there for those individuals to agree to be a part of their work,” Hillmann said.
WATCH: Binance decided FTX was beyond saving after two-hour review of balance sheet
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Meta shares hit a record high on Monday, underscoring investor interest in the company’s new AI superintelligence group.
The company’s shares reached $747.90 during midday trading, topping Meta’s previous stock market record in February when it began laying off the 5% of its workforce that it deemed “low performers.”
Meta joins Microsoft and Nvidia among tech megacaps that have reached new highs of late, all closing at records Monday. Apple, Amazon, Alphabet and Tesla remain below their all-time highs reached late last year or early this year.
Meta CEO Mark Zuckerberg has been on an AI hiring blitz amid fierce competition with rivals such as OpenAI and Google parent Alphabet. Earlier in June, Meta said it would hire Scale AI CEO Alexandr Wang and some of his colleagues as part of a $14.3 billion investment into the executive’s data labeling and annotation startup.
The social media company also hired Nat Friedman and his business partner, Daniel Gross, the chief of Safe Superintelligence, an AI startup with a valuation of $32 billion, CNBC reported on June 19. Meta’s attempts to buy Safe Superintelligence were rebuffed by the startup’s founder and AI expert Ilya Sutskever, the report noted.
Wang and Friedman are the leaders of Meta’s new Superintelligence Labs, tasked with overseeing the company’s artificial intelligence foundation models, projects and research, a person familiar with the matter told CNBC. The term superintelligence refers to technology that exceeds human capability.
Bloomberg News first reported about the new superintelligence unit.
Meta has also snatched AI researchers from OpenAI. Sam Altman, OpenAI’s CEO, said during a podcast that Meta was offering signing bonuses as high as $100 million.
Andrew Bosworth, Meta’s technology chief, spoke about the social media company’s AI hiring spree during a June 20 interview with CNBC’s “Closing Bell Overtime,” saying that the talent market is “really incredible and kind of unprecedented in my 20-year career as a technology executive.”
An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.
Roselle Chen | Reuters
Joby Aviation stock soared about 12% as the flying air taxi maker got closer to launching a service in the United Arab Emirates.
The electric vertical takeoff and landing, or eVTOL, company said Monday that it delivered its first aircraft to the UAE and has completed piloted flight tests as it readies for a 2026 launch in the region.
“Our flights and operational footprint in Dubai are a monumental step toward weaving air taxi services into the fabric of daily life worldwide,” said founder and CEO JoeBen Bevirt in a release. He called the Middle East nation a “launchpad for a global revolution in how we move.”
Joby’s planned launch in the UAE was announced in February 2024 as part of an agreement with Dubai’s Road and Transport Authority. The deal included exclusive rights to conduct air taxi service in Dubai for six years.
As part of the project, Joby said in November that it began building one vertiport at Dubai International Airport, with three additional locations slated for Palm Jumeirah and Dubai’s downtown and marina. Joby also announced an air taxi agreement with three Abu Dhabi government departments in 2024.
The California-based company has made other expansion moves in the Middle East. Shares jumped earlier this month after Saudi Arabian firm Abdul Latif Jameel announced a roughly $1 billion investment for up to 300 eVTOLs. The firm participated in Joby’s Series C funding round.
Joby shares have surged more than 32% this year, swelling its market capitalization to over $9 billion.
Demand for air taxis, which take off and land similar to helicopters, has gained momentum in recent years. The service faces regulatory and safety hurdles but has been lauded for its ability to cut traffic congestion and slash emissions.
Earlier this month, President Donald Trump signed an executive order that included a pilot program for testing electric air taxis.
Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.
Joe Raedle | Getty Images
Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.
CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.
“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”
The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.
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