Over the weekend, leading crypto exchanges Binance and FTX made the headlines after Binance conducted a bulk transfer of about 23 million (approximately $583M) of FTX’s native token, FTT.
Changpeng Zhao (CZ), the CEO of Binance, noted in a tweet that his company will liquidate its entire holdings of the FTT token. Why?
How It All Started
Earlier last week, a leaked balance sheet of FTX’s sister company, Alameda Research, revealed that a large number of the company’s assets are its FTT token, amounting to $3.66 billion. Such exposure to a singular asset is usually unideal, as any downtrend in that asset’s price shakes the firm’s financial system.
Four days later, Caroline Ellison, the CEO of Alameda Research, commented on the rumored information about her company’s balance sheet. She stated that the leaked balance sheet was only “a subset” of the company’s entire funds. She added that the firm had more than 10 billion worth of funds that were not shown in the leaked data.
Sam Bankman-Fried, the CEO of FTX, supported Ellison’s comment, referring to the leaked balance sheet as “a bunch of unfounded rumors.”
Ellison’s comments came rather late, as Binance moved to liquidate its entire holdings of the FTT token a day prior. CZ commented on the action taken by his company via a Twitter post, noting that Binance had $2.1 billion worth of funds received in FTT and Binance stablecoin (BUSD).
According to him, the fund was received by his company following its exit from FTX equity last year. It is noteworthy that the $583 million fund is only part of the entire FTT holdings with Binance.
Likely referring to the rumored dependence on the FTT token, CZ said that the driving force of the company’s action to sell the tokens was “due to recent revelations that have came to light.”
Alameda’s CEO Offers Buyout
CZ added in his comments that the sale will occur within a few months, citing current market conditions and limited liquidity as reasons for it. He said this will minimize the impact on the crypto market.
Shortly after, Ellison made an offer for Alameda to buy all the FTT tokens for $22 per token. However, Binance is yet to comment on her offer.
Meanwhile, the FTT token appears to be resilient, as it has not plunged deeply since the start of the battle between the two exchanges. At the time of writing, it traded at $22.41 which is only a 14% decrease from its price at the start of the weekend.
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