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According to former Alameda Research CEO Caroline Ellison, a single tweet from Binance CEO Changpeng “CZ” Zhao contributed to the failure of cryptocurrency exchange FTX.

Testifying in Sam “SBF” Bankman-Fried’s criminal trial on Oct. 12, Ellison reportedly placed part of the blame for the collapse of FTX on CZ’s social media activity. In the now famous tweet on X (formerly Twitter) from Nov. 6, 2022, CZ announced that Binance would be liquidating its holdings of FTX Token (FTT) “due to recent revelations that have came to light.” 

According to many reports, the liquidation of the tokens caused retail investors to follow Binance’s example and withdraw funds from FTX. The run on the platform led to FTX halting withdrawals and filing for bankruptcy on Nov. 11.

According to Ellison, although the tweet “contributed” to FTX’s collapse, the main reason was Alameda borrowing $10 billion from the exchange “it couldn’t repay.” She first took the stand in SBF’s trial on Oct. 10, testifying that Bankman-Fried directed her to have Alameda take billions of dollars from FTX without users’ consent.

CZ pushed back against claims that one of his tweets “destroyed FTX” in a Dec. 6 thread, saying, “No healthy business can be destroyed by a tweet.” He pointed to Ellison’s own social media activity from Nov. 6, claiming Alameda’s offer to buy Binance’s FTT holdings “was the real cause for people to dump” the tokens.

The information provided by the former Alameda CEO at trial included Bankman-Fried’s apparent ambition to become the president of the United States, creating multiple “alternative” spreadsheets of Alameda’s financials to present to Genesis, and SBF looking to Saudi Crown Prince Mohammed bin Salman as a potential backer of the exchange. Her testimony on cross-examination from defense counsel Mark Cohen seemed to focus on Bankman-Fried’s knowledge of Alameda’s operations.

On questioning from Cohen, Ellison testified that she “might have said that [SBF] might not have known” about her concerns “putting FTX customers’ funds at risk.” Assistant U.S. Attorney Danielle Sassoon called the claim “vague.”

Related: FTX hacker moves $120M amid Sam Bankman-Fried trial: Report

Ellison took the stand on the seventh day of SBF’s criminal trial, which began on Oct. 3. She was one of the first FTX and Alameda insiders to plead guilty as part of an agreement with U.S. authorities for her testimony.

Bankman-Fried has pleaded not guilty to seven criminal charges in his first trial, expected to run through November. He will face an additional five counts in a March 2024 trial.

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