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Binance is Selling Off FTT As Worries About FTX Exchange Balance Sheet Mount

Binance is Selling Off FTT As Worries About FTX Exchange Balance Sheet Mount
Binance is Selling Off FTT As Worries About FTX Exchange Balance Sheet Mount

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The CEO of Binance, Changpeng Zhao, said that the exchange would sell all the FTT tokens held in its portfolio. Zhao said that the sale was caused by some revelations that had recently come to light.

Binance to sell off FTT

In the Twitter thread, Zhao did not mention the amount of FTT tokens the Binance exchange would sell. However, he said the sale would be part of Binance’s exit from FTX equity in 2021, where Binance received around $2.1 billion worth of BUSD and FTT tokens.

In the initial tweet, CZ said that the sale of the FTT tokens would be made in a manner that lowers the impact on the market, adding that the sale would take several months to be completed. Binance has already started selling the tokens, with Whale Aler5t showing an address that transferred 22,999,999 FTT tokens at over $584 million from an unknown wallet to Binance.

Zhao explained that the exchange was selling FTT as a “post-exit risk management” given the lessons learned from the collapse of Terra Luna. He also added that the company would not support those that lobbied against other industry players.

The FTT token and Solana, a favorite of FTX’s CEO, Sam Bankman-Fried, have plunged significantly. FTT has plunged by around 10% over the past day, while SOL has dropped by around 13%. The broader market is also bearish today amid the uncertainty of the financial strength of FTX and its sister company, Alameda Research.

Alameda Research’s balance sheet

A report by CoinDesk revealed that the balance sheet of Alameda Research is filled with the FTT token issued by the FTX exchange. While Alameda is within its legal rights to hold FTT in its balance sheet, the numbers show that the financial muscle of Alameda lies in a token issued by its sister company and not on independent assets such as fiat or other cryptocurrencies.

As of June 30, the assets owned by Alameda were $14.6 billion, indicating that the investment firm is large. However, the largest asset owned by the company is $3.66 billion worth of “unlocked FTT” and $2.16 billion of “FTT collateral.” A large number of FTX tokens comprise the company’s $8 billion worth of liabilities.

The other large assets within the company’s balance sheet are $3.37 billion worth of crypto and a large number of SOL tokens. Alameda owns $292 million of “unlocked SOL,” $41 million of “SOL collateral,” and $863 million of “Locked SOL.” The FTX CEO was one of the early investors in the Solana ecosystem.

However, the CEO of Alameda has denied the claims that the company’s financial situation is wanting. Instead, she argued that the numbers reflected in the balance sheet were not a true reflection of the company’s financial position, as Alameda owned other assets. She has also offered to buy the FTT tokens liquidated by Binance for $22 each.

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