Binance has decided to sell all of its FTX Tokens in light of "recent developments"
November 7, 2022 6:30 PM
Binance CEO Changpeng Zhao stated that the exchange was forced to liquidate owing to "recent developments," adding that the sale of the company's tokens could take months to complete because of its large holdings.
FTX Token FTT, the native token of rival exchange FTX, will be completely liquidated, according to Changpeng "CZ" Zhao, CEO of cryptocurrency exchange Binance.
Zhao announced the decision in a tweet on November 6 and cited "recent disclosures that have come to light" as the reason.
CZ later tweeted that the FTT liquidation was "simply post-exit risk management," alluding to the lessons learnt from the demise of Terra's Luna Classic (LUNC) and its effects on the market.
The speaker continued, "we won't support people who lobby against other industry participants behind their backs."
It has been reported that billions of dollars worth of Alameda Research's assets are tied up in FTX's token, prompting Binance to decide to sell the token. Alameda Research was created by Sam Bankman-Fried.
CEO of Alameda Research Caroline Ellison tweeted on November 6 that the company's financial statements don't tell the whole story since they only cover "a fraction of our corporate entities" and additional assets worth over $10 billion "aren't shown there."
Bankman-Fried agreed with Ellison that "a bunch of baseless allegations have been spreading" and tweeted his support for Ellison's claim.
Although Zhao did not specify how much FTT Binance will sell, he did disclose that the exchange had around $2.1 billion USD equivalent in Binance USD (BUSD), the stablecoin of the exchange, and FTT following its withdrawal from FTX equity last year.
The token sales, he said, would take "a few months to complete" and Binance would strive to conduct them in a way that "minimizes market impact."
Zhao stated that Binance was dumping tokens as part of a token sale, and on-chain research showed that roughly 23 million FTT, valued around $584 million at the time of writing, had been moved from an undisclosed wallet to Binance.
Within a two-hour window on November 6th, the price of FTT swung wildly on the succession of news, increasing from roughly $23 to $24.50 then plunging by more than 9% to $22.28. Over the last 24 hours, FTT has lost about $4.3% in value, selling at roughly $22.50.