FTX’s native token FTT has experienced a volatile weekend as Binance began liquidating its tokens due to “recent revelations that have came [sic] to light,” according to Binance CEO CZ. The FTT token is down 9.4% on the day as of press time.
The local bottom for Nov. 6, however, was as low as $12.42, down 15% since Saturday, Nov. 5. FTX uses the FTT as collateral for several loans leading to fears of another major crypto meltdown should FTX receive a large margin call.
Praėjusiais metais „Binance“ pasitraukus iš FTX akcijų, „Binance“ gavo maždaug 2.1 mlrd. USD ekvivalentą grynaisiais (BUSD ir FTT). Atsižvelgdami į neseniai paaiškėjusius faktus, nusprendėme likviduoti bet kokį likusį FSM, taikomą mūsų knygoms. 1/4
- CZ 🔶 Binance (@cz_binance) Lapkritis 6, 2022
Binance selling over $500 million in FTT tokens
Rumors of CZ’s involvement started early on Sunday, Nov. 6, as FTX’s native token, FTT, fell sharply. There are fears that the downturn could trigger liquidations for FTX, resulting in a Terra Luna-style “death spiral.”
Looks like CZ is slowly dumping $500M worth of FTT on the market, if he continues many of Alameda’s FTT backed loans will be liquidated causing a death spiral.
Let the party begin! pic.twitter.com/lKJ1zwr17S— Bitcoin vs. Gold (@VersusBtc) Lapkritis 6, 2022
Most of FTX’s crypto assets are tied to the FTT token to the tune of $14 billion. Therefore, a drop in price of 15% would have reduced FTX’s holdings by around $2.1 billion before the token began to recover.
The FTT tokens held by Binance are assets received as part of its exit from an early investment in FTX. While the news may appear bearish for FTT, CZ has stated that he ketina to liquidate the tokens in a manner that “minimizes market impact.”
CZ taip pat atmesta that the move was an act of aggression against a competitor, clarifying that ” every time a project publicly fails it hurts every user and every platform.”
Is FTX now insolvent?
Rumors are also doing the rounds of nemokumas issues for Alameda Research, the company behind FTX CEO Sam Bankman-Fried’s empire. A substack article published on Nov. 4 stated that the “FTT Token Is Another Stupid Flywheel” similar to Celsius’s CEL token.
The similarities between the two tokens are laid out in the report, as well as on-chain data revealing that “FTT ownership is highly concentrated, with 93% of the total tokens held by only 10 addresses.”
The volatility was outlined by CryptoCred, who gave a play-by-play of the weekend revelations around the FTT token’s price action.
FTT nukes on Alameda insolvency rumours
FTT bounces on Caroline clarification tweet
FTT nukes again on Binance selling their holdings
FTT bounces again on Caroline saying they’ll buy it all
It’s Sunday.
Sveiki atvykę į kriptovaliutą.
- Cred (@CryptoCred) Lapkritis 6, 2022
SBF retweeted a post by Caroline Ellison, the current CEO of Alameda Research, as she attempted to carry out damage control around the speculation. Ellison asserted that the group of companies has over $10 billion in assets that have not been included in recent leaked numbers.
Keletas pastabų apie balanso informaciją, kuri neseniai buvo išplatinta:
– tas konkretus balansas skirtas mūsų įmonių pogrupiui, mes turime > 10 mlrd. USD turto, kuris ten neatsispindi– Karolina (@carolinecapital) Lapkritis 6, 2022
Besides the retweet, SBF is publicly unworried about the volatility, as his only other posts on Nov. 6 focused on FTX funkcijos instead of insolvency fears.
However, the crypto community has been laser-focused on the issue throughout Nov. 6 as Bitcoin Maxi of Swan Bitcoin questioned whether SBF has “$580M lying around” to buy back the tokens.
It’s real. Binance dumping half a billion of FTT.
Does Scam Bankster-Fraud have $580M lying around? Maybe he can jack up yields to attract more retail deposits on FTX Earn. That seemed to work well for Celsius 🤦♂️ https://t.co/Pjqk7SC1WN
— Cory Swan.com⛓️1999-2000-2001 (@coryklippsten) Lapkritis 6, 2022
This is an ongoing story; the article will be updated as more information becomes available.
Source: https://cryptoslate.com/fears-of-terra-luna-style-collapse-of-ftx-native-token-ftt-as-binance-liquidate-its-holdings/