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    Home»News»Business»FTX Token Drops 14% as Binance Liquidates FTT Holdings
    Business

    FTX Token Drops 14% as Binance Liquidates FTT Holdings

    Anietie DavidBy Anietie DavidNovember 7, 2022Updated:November 7, 2022No Comments3 Mins Read
    FTX Token Drops 14% as Binance Liquidates FTT Holdings
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    Binance’s decision to liquidate Its entire FTT holdings pits two of the biggest crypto exchanges against each other.

    The CEO of Binance tweeted on Sunday that he will sell the leftover FTT tokens that he acquired as part of his exit from Alameda sibling business FTX last year in response to a scoop on trading firm Alameda Research’s financial sheet. The CEO of Binance, did not specify how much FTT his company will sell, but he did note that as part of the cryptocurrency exchange’s withdrawal from FTX equity last year, Binance acquired BUSD and FTT valued at about $2.1 billion.

    Blockchain users witnessed significant sums of FTT being offloaded onto Binance from an anonymous wallet before they even had time to process what CZ had said. Later, CZ verified that as part of the liquidation, Binance disposed of 23 million FTX tokens valued at $584 million. One of the first investors in FTX was Binance, which sold its holdings in the company last year for $2.1 billion paid in BUSD and FTT.

    Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.

    — CZ 🔶 Binance (@cz_binance) November 6, 2022

    Over the course of a day, FTT’s price fell 14% to $22.02, its lowest level ever.

    The Story Behind Binance Liquidating FTT Holdings 

    CZ’s announcement follows a leaked balance statement that showed Sam Bankman-trading Fried’s company Alameda Research had $5.8 billion worth of FTT tokens as of June 30. This includes FTT tokens that were pledged as security. Alameda’s assets were valued at $14.6 billion, but its liabilities were $8 billion, including $7.4 billion in unreported loans. Investors were concerned that Alameda has a $5.82 billion exposure to FTT, but FTT’s market value is only $3.32 billion, or 160% of FTT’s entire market cap.

    In separate developments, FTX CEO Sam Bankman-Fried recently said in an interview that his company was working on a plan to launch its stablecoin. He also confirmed reports that FTX was looking to raise more funds. Last month, FTX won the bid to acquire bankrupt lender Voyager.

    Alameda Research’s CEO, Caroline Ellison, rebuffed media claims that its balance sheet has overexposure to FTT and said the leaked financials present an incomplete picture as it doesn’t contain details of another $10 billion that the company has on its balance sheet. She also offered to buy back Binance’s FTT holding at $22 per coin.

    – the balance sheet breaks out a few of our biggest long positions; we obviously have hedges that aren’t listed
    – given the tightening in the crypto credit space this year we’ve returned most of our loans by now

    — Caroline (@carolinecapital) November 6, 2022

    @cz_binance if you're looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!

    — Caroline (@carolinecapital) November 6, 2022

    She also refuted insolvency claims, “- the balance sheet breaks out a few of our biggest long positions; we obviously have hedges that aren’t listed – given the tightening in the crypto credit space this year, we’ve returned most of our loans by now.”

    Alameda Research Binance Blockchain Cryptocurrency FTT FTX Exchange
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    Anietie David

    Anietie has worked in the blockchain industry for three years, gaining experience in blockchain technology, cryptocurrencies, DeFi, and NFTs. As a seasoned content writer, he is passionate about creating effective content strategies for blockchain brands. In addition to content writing, he also has a strong interest in front-end development. When he's not working, he spends his time reading horror novels or playing CODM.

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