FTT ‘revelations’ sink token price: Why is Binance offloading all $529m of its SBF’s FTX holding?
11:43, 7 November 2022
FTT, the native token of FTX cryptocurrency exchange platform, sank over 10% in a matter of hours after Binance said it would get rid of all of its FTT holdings in the wake of “recent revelations.”
On Sunday afternoon, Binance CEO Changpeng ‘CZ’ Zhao tweeted that his company would “liquidate any remaining FTT on [its] books.” This equates to $529m, according to Bloomberg counts.
The revelations that prompted the decision, referred to a leaked balance sheet of Alameda Research, a hedge fund owned by the FTX chief executive, Sam Bankman-Fried (SBF), which showed an overlap between the two firm's financials.
FTX (FTT) to US Dollar
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
Alameda to Binance: 'We will buy all your FTT today at $22'
During the weekend, CoinDesk published a leaked balance sheet showing that Alameda owned “$5.8bn of FTT tokens ($3.66bn of “unlocked FTT” and $2.16bn of FTT tokens pledged as collateral) as of June 30. Alameda was revealed to have $14.6bn in assets and $8bn in liabilities, including $7.4bn in unidentified loans.”
In response, Alameda's CEO, Caroline Ellison, defended the financial soundness of its firm. Ellison wrote that the leaked document was for “a subset of our corporate entities.”
“We have over $10bn of assets that aren’t reflected there,” she wrote. “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's CEO concluded.
Responding to CZ's tweet about Binance liquidating its FTT position, Ellison offered to buy all of Binance's FTT holding for $22 a token.
At the time of writing, FTT was trading at $22.46, according to CoinMarketCap.com.
@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
Binance phasing out its FTT stash sale
Commenting on liquidating Binance's FTT stash, CZ said the sale would be done over a period of time to “minimize market impact.”
“We will try to do so in a way that minimizes market impact,” CZ wrote. “Due to market conditions and limited liquidity, we expect this will take a few months to complete.”
“Binance always encourages collaboration between industry players. Regarding any speculation as to whether this is a move against a competitor, it is not. Our industry is in its nascence and every time a project publicly fails it hurts every user and every platform.”
“We typically hold tokens for the long term. And we have held on to this token for this long. We stay transparent with our actions,” he added.
