Cryptocurrency

Sam Bankman-Fried Stands Ground Against Binance as FTT Slammed

Bankman-Fried stands firm, FTX token slips, and BNB coin rises. Speculations of FTX’s insolvency have swirled around the crypto market after Binance CEO Changpeng Zhao shared a revealing statement.

On Nov. 6, CZ announced via the posts on Twitter that Binance is in the process of getting rid of all of its reserves in FTT tokens, FTX’s native token.

Binance’s Exit From FTX Equity

CZ’s statement pointed out Binance’s withdrawal from FTX capital last year in exchange for $2.1 billion worth of BUSD and FTT. The CEO went on saying that Binance “decided to liquidate any remaining FTT on our books” due to the exposure that was made clear recently.

The “recent revelation” CZ mentioned is potentially linked to rumors of FTX’s liquidity crisis. Alameda Research, the exchange’s backyard, is said to be in trouble with the large number of illiquid tokens including SOL, SRM, FIDA, MAPS, and OXY.

Doubts are put on the background of FTX exchange after its leaked balance sheet likely showed that billions of dollars worth of Alameda’s assets are tied up in FTX’s token.

According to CZ, the decision is not an easy option given the fact that Binance is always on mission to stimulate industry collaboration. Reverse liquidation is in no way intended as a competitive move against its biggest competitor, but would rather be loss limitation.

It was confirmed in a post that he made on Sunday evening that he would not support anybody who engages in double games. It is inconceivable to him that he could ever back someone who would act in a way that would put covert pressure on other participants in the industry.

In reaction against the current speculations, Caroline Ellison, Alameda Research CEO, insisted that the details released made only a small part of the fund and that the unit still had $10 billion unaccounted for. She also affirmed that the firm was willing to buy all Binance’s FTT remaining tokens.

To wit,

“If you’re looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!”

Sam Bankman-Fried lately came up defusing this heated situation. The billionaire made an offer to buy back the tokens at a reduced price.

Investors Are Fleeing From FTX

It’s important to stay up to date with the news since the case dropped yet nothing has been really confirmed. Following CZ’s statement, investors have fled assets from the FTX exchange. The movement has added more pressure to the FTX exchange.

According to Nansen data, FTX recorded a massive outflow of stablecoins in the last 7 days.

The amount of stablecoins has flown out of the exchange, surpassing over $300 million. As a result, FTX’s balance has dried up and Alameda Research has seemingly sold assets to provide the exchange with liquidity.

Also, Alameda Research’s wallet addresses have decreased by $230 million in assets within a month, equivalent to 47% of total assets, with the majority of funds transferred to FTX and lending unit Genesis.

Alameda’s constant move of stablecoins to FTX seems to prove the negative realities that FTX is in financial trouble and Alameda needs money to support FTT as well as to pay investors who withdraw money from the exchange.

FTX CEO Sam Bankman-Fried reassured that the exchange’s situation is fine and has successfully processed billions of dollars of deposit-withdrawal transactions in the past hours, and expressed grace to users who still support the exchange.

After a series of losses, including the high-profile cases of Luna and Three Arrows Capital, investors are wary of FUD and FOMO.

Whether the rumors are credible or not, investors would prefer safety to subsequent regret. There is still no apparent point ahead, and the “white knight” is in a hard chess position.

The post Sam Bankman-Fried Stands Ground Against Binance as FTT Slammed appeared first on Blockonomi.

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With 5 years of experience as an editor, Matthew has been a crucial part of TheTechly since its inception. He looks after the editing of news content published on TheTechly. Apart from investing his time in editing, he also provides well-researched news articles for the U.S. niche.
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