Crypto Dark Knight Stepping Up Where Crypto ‘White Knight’ Failed

Binance co-founder and CEO Changpeng Zhao says he plans to help digital asset firms struggling in the wake of FTX’s $32 billion collapse. CZ has been called the industry’s “Darth Vader” but it’s not his exchange that proved to be a crypto Madoff-style Ponzi scheme. That dubious honor goes to Sam Bankman-Fried, the media and political class darling who portrayed himself as the industry’s selfless “white knight.”

According to Barron’s:

Zhao on Monday said his company is forming an “industry recovery fund” to defend some crypto projects from the contagion caused by last week’s catastrophic failure of crypto exchange FTX.

“We want to help those projects to survive this turmoil,” Zhao said during an “Ask Me Anything” event shortly after the announcement, adding that many of those projects’ valuations are “much more reasonable” than they were last year.

Zhao’s announcement that Binance and potentially other funds could start backstopping crypto projects echoes Bankman-Fried’s efforts earlier this year, after the crash of a major stablecoin led to stress through the crypto industry. Bankman-Fried’s companies provided backstops to BlockFi and Voyager Digital, leading some industry proponents to compare him to J.P. Morgan during the 1907 banking crisis.

It is a stunning role reversal for Zhao and Bankman-Fried.

Bankman-Fried had long been viewed as a favorite of U.S. lawmakers. He appeared frequently in hearings on Capitol Hill, helped craft legislation to regulate the industry, and donated millions to political campaigns.

On the other hand, Zhao and Binance have held a much lower profile in U.S. discussions around crypto regulation. Binance in the past has claimed not to have a headquarters, seen as a move to avoid government oversight, though it also has a U.S. affiliate open to American investors.

Buried in this story is probably the most interesting side-note: Big Short and Moneyball author Michael Lewis has been shadowing SBF for months and has a book in the works on FTX. That’s going to be a page-turner.

For the past six months, Big Short author Michael Lewis had been shadowing Bankman-Fried for an upcoming book, and Lewis’ agent in an email last week told potential buyers of the book’s film rights that the author likens Bankman-Fried and Zhao to “Luke Skywalker” and “Darth Vader,” according to a report in The Ankler.