Binance liquidates all of its FTX token holdings after ‘recent disclosure’

Crypto exchange Binance CEO Changpeng “CZ” Zhao said his company will liquidate its entire position in FTX Token (FTT), the original token of rival exchange FTX.

In a November 6 tweet, Zhao said the decision was made After the “recent discoveries that came to light”.

In a subsequent tweet, CZ clarified that the FTT liquidation was “just post-exit risk management,” referring to lessons learned from Terra’s Luna Classic (LUNC) downfall and how it affected market players.

He also added, “We will not support people who are lobbying against other players in the industry behind their back.”

Cointelegraph understands that Binance’s decision to liquidate the token is due to reports surrounding a recently leaked balance sheet from Sam Bankman-Fried-founded Alameda Research, which alleges that Alameda’s assets worth billions of dollars are tied up in FTX tokens.

However, Carolyn Ellison, CEO of Alameda Research, said in a tweet on November 6 that the balance sheet was not reflective of the true story, noting that the balance sheet in question is only for “a subset of our corporate entities” and other assets worth more. Of the 10 billion dollars “not reflected there.”

Bankman Fried backed Ellison’s claim in a tweet, saying that a set of baseless rumors circulated.

Cointelegraph has contacted Binance for clarification on the reasons for the liquidation, and a company spokesperson said the company has no further updates “at this time.”

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Zhao did not say how much FTT Binance would sell but revealed that the exchange holds about $2.1 billion equivalent of Binance USD (BUSD) – the exchange’s stablecoin – and FTT due to its exit from FTX last year.

He added that Binance will attempt to sell the tokens in a way that “minimizes the market impact,” noting that he expects token sales to take “a few months to complete.”

An on-chain analysis showed nearly 23 million FTTs, worth about $584 million at the time of writing, transferred from an unknown wallet to Binance, which Zhao confirmed as part of the exchange’s token dump.

The price of FTT spread across the chain of ads, and in the space of two hours on November 6, the price rose from about $23 to $24.50, followed by a 9% crash to $22.28. FTT price is down over 4.3% in the last 24 trading hours around $22.50.