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Following concerns over Sam Bankman-FTX Fried’s cryptocurrency exchange’s solvency, Binance CEO Changpeng “CZ” has declared that Binance is selling off all FTT tokens. About 23 million of his FTX coins, valued at $529 million, are held by Binance. Sam Bankman-Fried stated this morning that FTX is fine despite the rumours.
The Insolvency Rumour
The FTX bankruptcy speculations started after CoinDesk revealed last week that FTT, FTX’s native exchange token, is included on Alameda Research’s balance sheet. It all began when it became apparent that it was accumulating: according to sources, the assets of FOX’s sister business Alameda total $14.6 billion. Locked FTT, valued at $3.66 billion, was the trading company’s largest asset, while FTT collateral, valued at $2.16 billion, was its third-largest asset. Financial transaction taxes make up more than $5 billion of the company’s assets, raising concerns about its ability to pay. Sam Bankman-Fried, the creator and CEO of FTX, has come under fire for his regulatory recommendations in a blog post that calls for limits pertaining to DeFi and may have inspired Zhao’s action.
According to “recent disclosures,” according to a recent tweet from Binance CEO Changpeng Zhao, the business has decided to sell all of its FTX (FTT) tokens.
This declaration supports rumours that were going around earlier today. Due to the lack of liquidity, Zhao predicted the sale would take months. But he also promised that Binance would work to lessen any negative effects on the market.
Why Is Binance Selling FTT? Binance Wants To Be Safe
Binance hopes to be ready this time with FTT tokens because Terra (LUNA) filed for bankruptcy earlier this year. After the divorce, we no longer pretend to love each other, CZ said in another tweet. We used to support one another. No one is a threat to us. However, we oppose backroom lobbying efforts against rival business players. Due to market conditions and a lack of liquidity, the liquidation is anticipated to take several months, according to the CEO.
The CEO of Binance emphasises that this is not a move against a significant rival. Following the sale of its investment in competing FTX, the exchange acquired Binance USD (BUSD) and FTT worth $2.1 billion last year. The statement was made days after reports of Alameda Research’s financial difficulties. A trading company with strong ties to FTX has significant exposure to FTT coins. It further asserts that since July, Alameda Research has been repaying loans. In this instance, according to Ellison, Alameda is “ready to buy” Binance’s $22 FTT token. If the exchange wants to reduce market impact. Zhao’s revelation caused FTT’s price to drop by more than 11%. But he was able to make up for it within an hour.
Caroline Ellison of Alameda Research advised purchasing the remainder of FTT on Binance. At a predetermined cost of $22 in order to reduce harm. FTT, the native token of FTX, declined 12% on the last day as a result of the news.