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In Light Of “Recent Disclosures,” Binance Has Decided To Sell All of Its FTX Tokens

Published

7 months ago

November 7, 2022

In Light Of "Recent Disclosures," Binance Has Decided To Sell All of Its FTX Tokens

Changpeng Zhao “CZ”, the chief executive officer of the cryptocurrency exchange, Binance, announced that his company would completely liquidate its holdings of FTX, the native token of the adversary exchange.

On November 6, CZ tweeted that recent developments were the basis for the company’s liquidation decision. He also stressed that the sale of the company’s tokens could take several months to complete due to the size of its stake.

As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022

CZ later tweeted that market participants should view FTT liquidation as “just post-exit risk management”. He suggested that there were important lessons to be learned from the recent Terra Luna Classic (LUNC) catastrophe.

He also said that the corporation would not help individuals who secretly advocate against other industry participants as it is against corporate policy.

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

The leaked Alameda Research balance sheet prompted cryptocurrency exchange Binance to list the token for sale. Cryptocurrency advocate and investor, Sam Bankman-Fried, formed Alameda Research. According to the company’s financial statements, Alameda has invested billions of dollars in FTX’s token.

Caroline Ellison, the Chief Executive Officer of Alameda Research, stated on Twitter on November 6 that the company’s balance sheet provided only part of the picture as it did not accurately reflect the situation at hand. She explained that it only included some of the corporate entities that make up the business, and other assets worth more than $10 billion are not listed there.

– 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

In a tweet, Bankman-Fried supported Ellison’s allegation and stated that many rumors that lacked any basis have been circulating.

2) A bunch of unfounded rumors have been circulating. You can see https://t.co/EBmqPhqCBl.
FTX keeps audited financials etc. And, though it slows us down sometimes on product, we're highly regulated.
— SBF (@SBF_FTX) November 6, 2022

Zhao’s Speakings on FTT

While Zhao didn’t specify how much FTT Binance will sell, he did say that the exchange held about USD 2.1 billion equivalent in Binance USD (BUSD) and FTT following its departure from FTX equity last year.

In addition, he mentioned that he believes it would take a few months to finish the token sales and that Binance will attempt to sell the tokens in a manner that “minimizes market impact.”

As part of the token dumping, Zhao confirmed on the blog of the cryptocurrency exchange that almost 23 million FTT, worth approximately $584 million at the time, were moved from a wallet whose location was kept secret to Binance.

CZ said his company will liquidate the entirety of its position in FTX Token, the native token of competing exchange FTX.

The price of FTT swung wildly as a result of the string of announcements, and throughout the course of only two hours, the price jumped from roughly $23 to $24.50, before plummeting by more than 9% to $22.28.