An alleged balance sheet from Alameda, the VC linked to FTX, has sparked rumors about the exchange's possible insolvency.
In a thread posted on his official Twitter account, Changpeng Zhao, CEO of Binance, has announced his intentions to sell all FTT tokens which they own. The decision was made shortly after rumours of a possible insolvency of FTX emerged.
Last year, Binance decided to sell all the capital in FTX, receiving in return billions (estimated at around $2.100 billion) in stablecoins (BUSD) and FTT, the exchange's native token.
“The liquidation of our FTT is just one Risk management, something we have learned from LUNA. “We supported FTX in the past, but we don’t want to make love after the divorce. We are not against anyone. But we will not support people who lobby against other industry players behind their backs,” CZ’s tweet explains.
Regarding the liquidation, the CEO of Binance has assured that they will do it in a controlled manner, minimizing the possible impact that could have for the sector. The objective is to maintain the good state of the market and reduce volatility as much as possible.
What happened to FTX?
The rumors they are referring to are those that point to the exchange being insolvent, since is too dependent on shares denominated in FTT. This suggests that the company could collapse if the token price falls.
These speculations appeared in the wake of the leak of an alleged balance sheet from Alameda Research, the investment arm of FTX.
Finally, those responsible for FTX have denied these rumors, stating that the rumors have been launched by its competitors.
Sam Bankman-Fried, CEO of FTX, has explained in a Twitter thread that FTX is not insolvent and has explained that they have sufficient liquidity to cover its clients' holdings, since they do not invest their clients' assets, which has allowed them to process all withdrawals.
At the same time, he explains that the exchange is highly regulated, which often backfires. FTX is audited, so it is required to maintain excess cash of over $1.000 billion at all times.
On the other hand, FTX and its CEO are known for their contributions to political lobbies Washington and for his support for industry regulations. This stance has not been well received by part of the community, which believes that the founder of the exchange is seeking to gain an advantage over the competition.
What about the FTT token?
The showdown between the two cryptocurrency giants has left one clear loser, the FTT token, which has lost 30% of its price in the last few hours, falling to $17,29.
FTT's total market valuation has also fallen by 23,30%, standing at $2.294 billion.
🚨 Breaking Update 🚨
New information from The block They point out that FTX could have stopped the withdrawals its customers.
According to Etherscan data, the latest withdrawal took place at 6:37 am (ET) on the Ethereum network. The Solana and Tron networks show similar records, indicating that withdrawals on all networks may have stopped at the same time.
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