FTT Token Price Plunges 10% in 24 Hours Following Binance Dump

In recent news, Binance has announced its intentions to liquidate all FTT tokens on the platform, citing some recent development. The change comes after weeks of criticisms of Sam Bankman-Fried, the founder and CEO of FTX, for regulatory suggestions he put up in a blog post that suggested limitations on DeFi. Since then, he has promised to change his regulatory stance.

Key Takeaway

  • Binance CEO CZ moves to liquidate all FTT tokens on its platform following some controversial tweets by Sam Bankman-Fried, CEO of FTX.
  • The FTT token price has taken a hit since the announcement, which has reduced prices, going from $25.55 to $23.03 in 24 hours.
  • Alameda research has pledged to buy the remaining FTT tokens from CZ at $22 per token to minimize the market impact of the liquidation on FTT tokens.

 

FTT Token Price
Photocredit: CryptoSlate

Selling its early stock holding in FTX, which it has since 2019, Binance received its payment in FTT last year. According to a statement from Zhao, FTX had acquired the remaining shares Binance owned in the company for $2.1 billion by combining FTT and BUSD, the stablecoin exclusive to Binance’s exchange.

Binance CEO, Changpeng “CZ” Zhao said, “As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion 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.”

Blockchain users witnessed significant sums of FTT being offloaded onto Binance from an unknown wallet. Later, CZ verified that Binance disposed of 23 million FTX tokens valued at $584 million as part of the liquidation.

According to CZ, the market circumstances and the lack of liquidity will cause the liquidation to take a few months to complete. He added that it would be carried out in a way that attempted to lessen the effect on FTT’s market.

Nevertheless, CoinGecko reports that FTT has dropped 9.5% in the last day from $25.55 to $23.03 after bouncing off a low of about $22 on Sunday.

What Does the “Recent Revelation” Mean?

Alameda Research was the subject of the “recent revelations” that CZ referenced in his tweet. FTX’s exchange token, FTT, is linked to billions of dollars worth of assets, according to media allegations based on leaked financial documents. Alameda Research’s trading platform was started by Sam Bankman-Fried (SBF).

These reports state that Alameda had assets and liabilities totalling $14.6 billion and $8 billion, respectively, as of June 30. Investors were concerned due to Alameda’s exposure to FTT, which is $5.82 billion, even though FTT’s market cap is only $3.32 billion, or 160% of FTT’s total market cap.

FTX CEO Sam Bankman-Fried recently stated in an interview that his company was putting the finishing touches on a plan to introduce its stablecoin. Additionally, he corroborated rumours that FTX was attempting to raise more money. The offer to purchase insolvent lender Voyager was won by FTX last month.

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Alameda Reacts

Caroline Ellison, the CEO of Bankman-Fried’s crypto trading company Alameda Research, has proposed to purchase Binance’s remaining FTT for a fixed price of $22 since CZ has said he wants to “minimize the market impact”.

She has also dismissed media assertions that the company’s balance sheet is overexposed to FTT and claimed that the leaked financial information paints an inaccurate picture. She stressed that the leak omits information on an additional $10 billion that the company has on its balance sheet.

In response to concerns of insolvency, she added, “- the balance sheet breaks out a few of our biggest long positions; we obviously have hedges that aren’t listed – given the tightening in the crypto credit space this year, we’ve returned most of our loans by now.”

Final Thoughts

Although the volatility of the crypto market is not to be questioned, the reason for CZ’s move to liquidate assets in FTT holdings has been lauded by some crypto enthusiasts.

It is not certain what the future holds for the FTT crypto token, but investors need to monitor the growth of this token carefully, especially in the coming weeks.

About Author

FTT Token Price
Florence Anderson
In-depth Crypto Researcher, with a decade's experience in cryptocurrency and blockchain technology. Highly innovative and open-minded.

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