Home » Binance Offloads FTT Tokens After Recent Revelations

Binance Offloads FTT Tokens After Recent Revelations

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Binance FTX

Due to recent revelations that have come to light, Changpeng Zhao (CZ), founder and chief executive officer (CEO) of leading cryptocurrency exchange Binance claims to liquidate the entirety of its position in FTT Token.

Alameda’s Balance Sheet Revelations

Following a leaked balance sheet from Alameda Research, a trading firm founded by Sam Bankman-Fried (SBF), alleging billions of dollars worth of Alameda’s assets are tied up in FTX’s token, consequently Binance decided to liquidate the token. FTX is one of the largest crypto exchanges that is also controlled by SBF. According to a private financial document reviewed by CoinDesk, Alameda Research reports $14.6B in assets and $8B in liabilities. This raises concerns about the company’s ability to repay its debt as its assets are largely composed of illiquid FTT tokens.

SBF retweeted a post by Caroline Ellison, the current CEO of Alameda Research, attempting to quell speculation about the size of assets owned by the group of companies. Ellison asserted that the group has over $10 billion in assets not included in recent leaked numbers.

Binance Offloading FTT Tokens

CZ elaborated that the  FTX native token, FTT, that Binance wants to offload is part of the $2.1 billion equivalent in FTT and BUSD tokens that it acquired after selling its FTX equity last year. He added that it would take months before the exchange fully offloads the tokens due to current market conditions and limited liquidity. Whale Alert showed that around 23 million FTT tokens, worth roughly $585 million, were transferred from an unknown wallet to Binance which CZ confirmed as part of the exchange’s token offloading.

Binance’s FTT Liquidation As Part Of Post-Exit Risk Management

CZ explained that the FTT liquidation was done out of caution and as part of post-exit risk management after Terra Luna Classic’s collapse to ensure that market conditions remained favorable. He emphasized that Binance is not against anyone and it won’t support people who lobby against other industry players behind their backs. Ellison responded directly to CZ on Twitter, writing that Alameda would be happy to buy everything at $22 to minimize the impact on the market, as CZ had stated was his goal. The price of FTT rolled on the series of announcements and currently trading at $22.70, down by 3.05% in the past 24 hours.

Jonathan Gibson

Jonathan Gibson

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