Binance To Liquidate Its Entire FTT Tokens Following FTX’s Insolvency Rumors

Binance CEO Changpeng “CZ” introduced that the alternate would dump all its FTT tokens following hypothesis relating to the solvency of Sam Bankman-Fried’s FTX crypto alternate. Binance holds about 23 million FTX tokens, price about $529 million. Amid the rumors, Sam Bankman-Fried tweeted early Morning that “FTX is okay. Property are nice.”

Key Takeaways

  • Binance introduced that it’s liquidating its holdings of FTT, following hypothesis relating to the solvency of FTX.
  • Binance holds about 23 million FTT tokens, price about $529 million
  • Following the information, FTT, the native token of FTX, fell 12% up to now 24 hours.

The Insolvency Rumor

FTX’s insolvency rumor started when CoinDesk revealed in an article final week that Alameda Analysis’s steadiness sheet was stacked with FTX’s native alternate token, FTT. FTX’s sister firm Alameda had property price $14.6 billion, based on the report. The buying and selling agency’s largest asset was revealed to be $3.66 billion in locked FTT, whereas its third largest asset was $2.16 billion in FTT collateral. Over $5 billion of the corporate’s property are FTT, elevating questions on its solvency.

Sam Bankman-Fried, FTX’s founder and CEO, has been criticized for his regulatory proposals in a weblog publish that beneficial restrictions relating to DeFi, which can have triggered the transfer by Zhao.

Binance Needs to Be Protected

Earlier this yr, Terra (LUNA) collapsed, so Binance desires to be ready this time with FTT tokens. In one other Tweet, CZ said: “Liquidating our FTT is simply post-exit danger administration, studying from LUNA. We gave help earlier than, however we cannot faux to make love after divorce. We aren’t in opposition to anybody. However we cannot help individuals who foyer in opposition to different business gamers behind their backs. Onwards.”The liquidation is predicted to take just a few months to finish because of market situations and restricted liquidity, stated the CEO. 

See also  JPMorgan Hires Former Celsius Exec as New Head of Crypto Regulatory Policy

The Backside Line

To attenuate the harm, Alameda Analysis’s Caroline Ellison supplied to buy Binance’s remaining FTT for a set value of $22. Following the information, FTT, the native token of FTX, fell 12% up to now 24 hours.