Binance CEO Changpeng Zhao has announced that the firm will be liquidating its holdings of the FTT cryptocurrency, created by crypto exchange competitor FTX.
Binance’s holdings of FTT is believed to be worth around $529m according to a Bloomberg report, and will now look to sell its shares in the crypto token after Zhao attributes “recent revelations” concerning FTX’s balance sheet.
Zhao made the announcement via Twitter last Sunday.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Zhao continued: “We will try to do so in a way that minimises market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete.
The latest move from Binance has been heavily suggested by a myriad of crypto experts and insiders as a way to mitigate FTX’s prominence to become and overtake the world’s largest crypto exchange platform.
Once established in 2019, FTX received backing and funding from Binance and its CEO and Founder, Sam Bankman-Fried, helped the crypto platform grow into the second largest exchange site per volume in 24 hours, by 2022.
Despite Binance acquiring a significant amount of volume more than FTX, they are viewed as competitors, with FTT also seen as an alternative to Binance’s own token, BNB. However, Zhao quickly dismissed Binance’s move to liquidate FTT holdings as a move that isn’t against a competitor.
He stated: “Binance always encourages collaboration between industry players. Regarding any speculation as to whether this is a move against a competitor, it is not. Our industry is in its nascency and every time a project publicly fails it hurts every user and every platform.
“We typically hold tokens for the long term. And we have held on to this token for this long. We stay transparent with our actions.”
Following the Binance announcement, $584m worth of FTT was transferred from a wallet to Binance’s exchange, confirmed by Zhao as the transfer was ‘part of its’ movement to liquidate its holdings.
In light of Binance’s decision, Bankman-Fried recently took to Twitter to denounce investor worries of FTT and to suggest that a competitor is “trying to go after us with false rumours”.
1) A competitor is trying to go after us with false rumors.— SBF (@SBF_FTX) November 7, 2022
FTX is fine. Assets are fine.
“FTX has enough to cover all client holdings. We don’t invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be,” stated Bankman-Fried.
“It’s heavily regulated, even when that slows us down. We have GAAP audits, with > $1b excess cash. We have a long history of safeguarding client assets, and that remains true today.“I’d love it, @cz_binance, if we could work together for the ecosystem.”