In 2008, a group of Wall Street traders saw the housing crash coming and decided to bet against the housing market, striking it rich in a story dramatized in the 2015 biographical film The Big Short.
A Twitter post featuring the faces behind this year’s failed crypto ventures—including SBF’s—for a movie called The Big Short 2, an imaginary sequel to the 2015 film, made the rounds over the weekend.
But Changpeng Zhao, also known as CZ, the CEO of crypto exchange Binance, which was involved in a series of events that culminated in the bankruptcy of rival exchange FTX, replied to the post, saying that he never officially took a short position against FTX’s native currency.
“Full disclosure: Binance never shorted FTT,” CZ wrote on Twitter on Sunday, referring to the FTT token used by FTX customers that has seen its value spiral downward over the past week.
Last week’s FTX meltdown rocked the crypto world, as the $32 billion cryptocurrency exchange platform filed for bankruptcy and saw its assets liquidated virtually overnight. The crash has also tarnished the once-glowing reputation of FTX founder and former CEO Sam Bankman-Fried—a.k.a. SBF—who now risks going to prison for mishandling customer funds.
Crypto crash
From the rubble, CZ has emerged as a clear winner, as his company Binance stands to gain the most from FTX’s collapse.
Binance’s decision to sell FTT is part of what ignited the whole crisis. Last week, a public Twitter feud between CZ and SBF ended with CZ dumping Binance’s holdings of FTT, worth around $500 million. Speaking at a conference in Indonesia last week, CZ said that the act was in response to a CoinDesk report on Nov. 2 revealing close financial ties between FTX and Alameda Research, another company founded by SBF.
When Binance dumped its tokens, it ignited the current crypto crisis by sparking a massive market selloff and $6 billion in withdrawals from FTX in under 72 hours.
But CZ and Binance could have been even bigger winners from the fiasco. In his Twitter post, he wrote that Binance still had “a bag” of FTT before it stopped selling the token when CZ received a call from SBF. It was a “very expensive call,” according to CZ.
Binance did not immediately respond to Fortune’s request for comment on CZ’s tweet.
Last week, CZ recounted how he had issued a letter of intent to buy FTX in a bid to protect users after SBF explained the situation to him. But Binance quickly walked back the offer on Nov. 9 after it said it took a look at FTX’s books. On Nov. 11, the Wall Street Journal reported that SBF had mishandled customer funds to invest in Alameda Research, a trading firm he also helmed.
Last week, CZ warned that FTX’s collapse could lead to bigger consequences for the larger crypto sector, saying it could have “cascading effects” and comparing it to the 2008 global financial crisis.
The problems for FTX are continuing to pile up. Over the weekend, the exchange said it was investigating the loss of $662 million in “unauthorized transactions” of its tokens, which took place in the 24 hours after the company declared bankruptcy on Friday.
On Sunday, CZ announced that Binance would be halting all deposits of FTT tokens on its platform, citing the unauthorized transactions involving FTX, and advised other crypto exchanges to do the same.
