Binance Announces Liquidating All of Its FTX Tokens, Amid Concerns Over Company’s Balance Sheet

Last week, CoinDesk published a report that sparked the controversy surrounding the financial health of Alameda Research, a company owned by FTX CEO Sam Bankman-Fried.

Amid concerns over Alameda’s balance sheet, Binance chief Changpeng Zhao decided to liquidate all of its FTX token (FTT) holdings. He said that this would be in continuation to Binance’s exit from FTX equity last year wherein they received $2.1 billion in USD equivalent in the form of BUSD and FTT.

As per reports from Etherscan, crypto exchange Binance moved 23 million FTT worth nearly half-a-billion dollar to crypto exchange Binance last Saturday afternoon.

But Binance chief Changpeng Zhao said that they would try to liquidate FTX tokens in a way that would not much impact the market conditions. He added: “We will try to do so in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete”.

CZ further clarified that this should not be seen as a move against its competitor. “Binance always encourages collaboration between industry players,’ he added.

The news of Binance exiting its FTT position has sent tremors across the market. Soon after the announcement, the FTT token price dropped 10% on Sunday. As of press time, FTX’s FTT tokens are trying at a price of $22.4 with a market cap of $2.9 billion.

The CoinDesk report showed a major anomaly regarding the illiquid FTT tokens that Alameda showed in its books issued by the FTX exchange itself. The report noted: “Both these firms have different businesses but the balance sheet of Alameda research shows significant amount of unlocked FTT token worth nearly $3.66 Billion out of total $14.6 billion”.

Alameda CEO Caroline also tweeted that the trading firm’s financial condition is stronger than what has been reflected in the CoinDesk report.

In one of his other tweet messages, CZ further clarified: 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. Onwards”.

On the other hand, Sam Bankman-Fried also made a series of tweets stating that FTX and Alameda are regulated and keep their financials audited. He also said that amid this cascade of liquidations, FTX has already processed billions of dollars of deposits/withdrawals today; we'll keep going.  (Taking up anti-spam checks to process more--sorry if you got those.  We're hitting node rate capacity, will keep going.)  Also tons of USD <> stablecoin conversions going on.