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Binance to sell off all of its FTX Token holdings
Binance CEO Changpeng Zhao cited “recent revelations” as the basis for the liquidation, stating the sale of FTX tokens might take months.
Changpeng “CZ” Zhao, the CEO of cryptocurrency exchange Binance, announced that his company would liquidate all of its holdings in FTX Token, the native token of rival exchange FTX.
Zhao stated that the choice was taken following “recent disclosures that have come to light” in a tweet from November 6.
Later, CZ said the FTT liquidation was “simply post-exit risk management,” citing the lessons learned from Terra Luna Classic's (LUNC) demise and the effects it had on market participants.
He also added, “we won't support people who lobby against other industry players behind their backs.”
There are rumors that the recent balance statement from Sam Bankman-Alameda Fried's Research, which claims that billions of dollars worth of Alameda's assets are tied up in FTX's token, is the cause of Binance's decision to liquidate the token.
The balance sheet is solely for “a portion of our corporate companies,” and additional assets worth more than $10 billion “aren't shown there,” according to Caroline Ellison, CEO of Alameda Research, who stated this in a tweet in November 6th.
In response to Ellison's assertion, Bankman-Fried tweeted that “a variety of baseless rumors have been spreading.”
Zhao didn't say how much FTT Binance would sell, but he did say that due to the exchange's departure from FTX equity last year, it has about $2.1 billion US dollars' worth of FTT and Binance USD (BUSD), its stablecoin.
He continued by saying that Binance will work to “minimize the market impact” and that he anticipated the token sales to take “a few months to finish.”
Zhao stated that the transfer of almost 23 million FTT, worth $584 million at the time, from an unidentified wallet to Binance was a part of the exchange's token unloading.
The price of FTT fluctuated due to the news, rising from almost $23 to $24.50 in a two-hour period in November before dropping more than 9% to $22.28. FTT is currently trading around $22.50, down more than 4.3% over the last 24 hours.