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FTT token drops after being dumped by Binance due to “recent revelations.”



Key facts:
  • The financial statements of the company that owns FTX Alameda were leaked, setting off alarm bells in the market.

  • Some fear cascading liquidations, but Alameda denies the risk.

The price of the FTX cryptocurrency exchange’s (FTT) native token fell nearly 12 percent a few hours ago. This came after Changpeng Zhao, CEO of the Binance exchange, announced that the company will be divesting its holdings in this digital currency. At the time of publication, the price of FTT is still falling and is trading at US$22.64.

“As part of its exit from its stake in FTX last year, Binance received approximately the equivalent of US$2.1 billion in BUSD and TLT.” explained Zhao in a message on Twitter. But he added that “because of the recent revelations that have come to light.” has decided to liquidate all the TLT held in its treasury..

The Chinese-born businessman – also known by his initials CZ – made it clear that. could conduct TLT sales for several order to minimize the impact of this move on the market. It argues that this is not an action against FTX:

“Binance always encourages collaboration among industry participants. As for speculation that this is a move against a competitor, it is not. Our industry is in its infancy, and every time a project fails publicly, it hurts all users and all platforms.”

Changpeng Zhao, CEO of Binance

The CEO of Binance has so far not made explicit what the “recent revelations that have come to light” are. Neither has Sam Bankman-Fried, CEO of FTX, who has merely tweetWe are all involved in this situation and I wish you all the best. all That moves the industry forward. Because I have a lot of respect for what they have done to build the industry as we see it today, whether they are reciprocal or not, and whether we use the methods or not. Including CZ.

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Graph showing the price of TLT over the past 7 days. Source: screenshot – CoinMarketCap.

Market fears over mass liquidations.

Although businessmen have not provided details, there is information that has been circulating for days on specialized websites that may explain what is happening.

According to a filtered equilibrium Of the Alameda finance company, owned by Bankman-Fried, the company’s main asset (about 88 percent of its net worth) is its holdings in ITF.

Alameda, according to rumors, allegedly used these tokens (issued by FTX, a company of the same owner) as collateral to obtain leveraged loans. “It is fascinating to see that most of the equity in Alameda’s operation is actually FTX tokens, centrally controlled and printed out of thin air,” commented Cory Klippsten, CEO of investment platform Swan Bitcoin, quoted by Coindesk.

When faced with such a situation, there are those who are afraid cascading liquidations that lead to the so-called “death spiral” or the occurrence of Massive damage to the cryptocurrency industry. For example, CryptoNews reported this year what happened to the USD stablecoin Terra (UST) and its counterpart Terra (LUNA). The debacle of these currencies impacted the entire ecosystem and the exacerbated the decline in the prices of several cryptoassets..

FTX responds to allegations and offers to buy tokens from Binance

From Alameda was pronounced its CEO, Caroline Ellison. The woman, via Twitter, wrote on behalf of the company and offered to purchase TLT tokens from Binance for $22..

Also, hours before Zhao’s message, Ellison had given his version of events. She is certain that the leaked budget belongs to the company she heads, but explains that “that specific balance sheet pertains to a subset of corporate entities.”. “We have over $10 billion of assets that are not reflected there,” he adds.

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He adds, “The balance sheet breaks down some of our largest long positions. He further explains, “We obviously have hedges that are not on the list, given the adjustment in the crypto credit space this year.” Also, Specifies, “We have already repaid most of our loans.”.

Here is how the price of the FTT token moved after the publication of the tuis discussed in this post. Source: Dorio – Twitter.

Since FTX is not a public company (i.e., FTX is not publicly traded), it is not required to file its financial statements.. This means that Ellison’s words must be trusted unless evidence is provided.

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