Clash Between Binance and FTX: Binance Will Sell Off Its FTT Tokens

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Could Binance and FTX, two of the biggest cryptocurrency exchanges, be experiencing some difficulties right now? The situation is still unclear as Binance prepares to liquidate the remaining FTT tokens it acquired from the company last year as part of Binance’s withdrawal from FTX ownership.

As far as can be determined, Binance got tokens representing around $2.1 billion in monetary value (in the form of BUSD and FTT tokens). In light of recent developments, CZ announced on Twitter that it will be selling up any leftover FTT.

Sunday was not a very fun day for the community as an unknown wallet transferred 30 million FTT tokens worth roughly $584.8 million to a Binance exchange wallet, which Binance CEO CZ later confirmed that it was part of the liquidation of the tokens.

Initial reports indicated that Sam Bankman-trading Fried’s business, Alameda Research, held the majority of its assets in illiquid cryptocurrencies, with FTT making up the bulk of its balance sheet.

Alameda had $14.6 billion in assets, $3.66 billion of which was free and clear FTT. Amounting to $2.16 billion, FTT collateral ranked third among all assets on the balance sheet.

However, CEO Caroline Ellison of Alameda Research shot off the rumors in a tweet, explaining that the reported financials only apply to a small portion of the company’s legal organizations. A lot more than $10 billion in Alameda’s assets aren’t shown there.

We have hedges that aren’t included on the balance sheet, but the balance sheet breaks out a handful of our major long holdings,” Ellison said in a tweet.

“CZ noted they will try to liquidate the FTT tokens in a manner that minimizes market impact,” meantime. We estimate a few months to finish this due to market circumstances and tight liquidity.

But Caroline Ellison tweeted back at the exchange, saying, “@cz binance if you’re seeking to minimize the market effect on your FTT sales, Alameda will gladly purchase it all from you today for $22!

Some are worried that Alameda Research is bankrupt since Ellison seems confident, and we all know what happened to Terra’s founder Do Kown.

Sam Bankman-Fried, founder of FTX, retweeted Ellison’s clarification tweet and responded to the recent events in a Twitter thread that comes off as sarcastic because it states, “that we’re all in this together, and I wish the best to *everyone* driving the industry forward,” which is obviously a dig at CZ.

1) Our sincere appreciation goes out to everyone who has helped us so far; we look forward to continuing our ascent together.

salute those who maintain their composure in the face of chaos. We value your assistance greatly.

SBF (@SBF FTX) November 6, 2022

Whether or whether they return the favor or use the same strategies, I have the utmost respect for what y’all have done to develop the business as it is now. For everyone’s sake, including CZ, it’s time to create,” SBF said on Twitter.

SBF said, “Make love (and blockchain), not war.” CZ is not one to be silent, though, and he responded appropriately to SBF’s tweet.

As we’ve learned from LUNA, we may see the liquidation of our FTT as a necessary part of our post-exit risk management strategy. We helped previously, but now that we’re no longer together, we’re not going to act like we’re in love. Absolutely no one is fighting us. However, we won’t defend those that attempt to undermine their competitors in the sector without their knowledge. CZ only tweeted, “Onwards.”

CZ said, “Not locked.,” when asked why Binance delayed until now to sell the tokens. Usually, we simply wait it out. This definitively disproves the claim that we would ever assault a “competitor.”

CZ pointed out that it is not economically prudent to retain the tokens for this long, and that there is a limit to holding even if they want the industry to flourish together.

The price of one FTT token is $22.04 at the time of this writing.

In June, Binance’s CEO CZ said that, given the current bear market, “bailouts of bad projects make no sense,” and he advised the community to abandon failing ventures. Let’s watch to see how CZ handles the FTX problem and how these liquidations effect the already sluggish market.

Compiled by Coinbold

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