Are the top cryptocurrency exchanges, Binance and FTX going through a rough patch? Well, things are looking messy right now as Binance is gearing up to sell the rest of the FTT tokens it received from the firm last year as part of Binance’s exit from FTX equity.
Binance apparently received roughly $2.1 billion equivalent in cash in the form of BUSD and FTT tokens. “Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books,” CZ tweeted.
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.
Earlier reports came in that the majority of Sam Bankman-Fried’s trading firm Alameda Research’s assets are reportedly held in illiquid altcoins, and FTT makes up the majority of its financial sheet.
The assets of Alameda totaled $14.6 billion, $3.66 billion of which was made up of unlocked FTT. The third-largest entry on the assets side of the accounting ledger was $2.16 billion in FTT collateral.
But Alameda Research’s CEO Caroline Ellison dismissed the reports by tweeting that the specific balance sheet is for a subset of their corporate entities. Alameda has more than $10b of assets that aren’t reflected there.
“The balance sheet breaks out a few of our biggest long positions; we obviously have hedges that aren’t listed,” Ellison tweeted.
Meanwhile, CZ noted, “they will try to liquidate the FTT tokens in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete.”
Caroline Ellison did respond to this statement by tweeting, “@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!”
Ellison’s confidence reminds the community of now-defunct Terra founder Do Kown, and we all know how that ended up for him, so concerns are now being raised on whether Alameda Research is insolvent.
FTX founder Sam Bankman-Fried retweeted Ellison’s clarification tweet and responded to the latest events in a Twitter thread which comes off as sarcastic as it notes “that we’re all in this together, and I wish the best to *everyone* driving the industry forward,” and even a kid can tell it’s a jab towards CZ.
“Because I respect the hell out of what y’all have done to build the industry as we see it today, whether or not they reciprocate, and whether or not we use the same methods. Including CZ. Anyway — as always — it’s time to build,” SBF tweeted.
SBF didn’t end at that as he further added, “Make love (and blockchain), not war.” CZ is not the one to keep quiet as he gave a befitting reply to SBF’s tweet.
“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 tweeted.
To a query on why Binance waited until now to sell these tokens if they weren’t locked, CZ replied, “Not locked. We usually just hold. It removes any doubt that we would attack a “competitor.”
CZ noted that it is not financially sensible to hold the tokens this long, and even if they want the industry to grow together, there is a limit to hold.
At the time of writing FTT token is trading at a price of $22.04.
In June, Binance CEO CZ did say that bailouts of bad projects make ‘No Sense’ in the current bear market and urged the community not to keep these terrible businesses around. Let’s see how CZ is going to handle the situation with FTX and how these liquidations are going to affect the already slow market.
