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Crypto News » News » Blockchain News » Binance CEO Confirms $529 Million FTX Token Dump

Binance CEO Confirms $529 Million FTX Token Dump

In the latest crypto news, the CEO of the largest crypto exchange, Binance, announced that the exchange would sell all $FTT tokens in its holdings on a recent Twitter thread. 

FTT is the cryptocurrency issued by crypto billionaire Sam Bankman-Fried’s cryptocurrency exchange, FTX. FTX is a competing exchange in which Binance once had a small stake. Binance CEO Changpeng Zhao claimed that Binance opted to sell the remaining funds after receiving $2.1 billion in Binance USD and FTT coins when it withdrew from that investment last year.

According to Bloomberg, an anonymous person familiar with the exchange told reporters that Binance possesses around 23 million FTX tokens, which are now valued at approximately $529 million at current pricing.

Binance CEO Cites “Recent Revelations”

In the Twitter announcement, the Binance Founder and CEO stated, “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 come to light, we have decided to liquidate any remaining FTT on our books.”

Zhao did not immediately elaborate on what “recent revelations” led to the $529 million dump. However, in a later Tweet, he stated, “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.” 

Regarding the token sale, Changpeng Zhao noted that outright dumping a token has market implications for the consumers involved, so it expects to complete the total liquidation of FTT tokens over the course of a few months. He also cited the reason for this liquidation strategy was “limited liquidity.”

The series of tweets fueled theories on what other factors led to the decision to sell. In a thread in response to CZ’s announcement, @MikeBurgersburg wrote that leaked financial information on Alameda Research, the hedge fund founded by the FTX CEO, Sam Bankman-Fried, showed that the company’s holdings of FTX Token (FTT) are its biggest asset. On Alameda’s balance sheet, the FTT token allegedly represents approximately one-third of all assets and 88% of net equity. In other words, a crypto token issued by SBF’s other company is the firm’s largest asset, and a sizable amount of its assets are tokens issued by other associated parties. 

SBF Responds To Insolvency Rumors

Early on Monday morning, FTX CEO tweeted that amid weekend rumours concerning the solvency of the cryptocurrency exchange and Alameda Research, stating, “FTX is fine. Assets are fine.”

He added, “FTX has enough to cover all client holdings. We don’t invest in client assets (even in Treasurys). We have been processing all withdrawals, and will continue to be.”

The chief executive officer of Alameda, Caroline Ellison, responded to Alameda Research leaks “that specific balance sheet is for a subset of our corporate entities, we have >$10b of assets that aren’t reflected here.”

In response to the sale of FTT, Ellison tweeted directly to the Binance CEO, “if you are looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!” According to Coindesk, she didn’t respond to a request for further comment.

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