The CEO of Alameda has proposed to purchase $22 worth of Binance’s FTT token holdings to lessen the impact on the market.
Chanpeng Zhao, the CEO of Binance, announced via Twitter on Sunday that his exchange will sell the last of the FTT tokens he had acquired as part of his exit from Alameda-affiliated FTX last year.
The technology entrepreneur did not specify how much FTT his company would sell, but as part of the cryptocurrency exchange’s withdrawal from FTX ownership last year, Binance got cash in the form of BUSD (Binance’s stablecoin) and FTT valued at approximately $2.1 billion USD.
CZ initially tweeted that the sale of Binance will be carried out with “little market impact” and would take “a few months to complete.”
Meanwhile, Caroline Ellison, the CEO of Alameda, tweeted that the trading company’s financial situation is better than what was shown on the balance sheet, according to CoinDesk. In response to the post made by the CEO of Binance, she also offered to acquire his company’s FTT token holdings for $22 apiece.
Extreme volatility was experienced by FTX’s native token (FTT) during the back-and-forth Twitter conversation. FTT’s price dropped 15% in a day to $21.42, its lowest level since June, according to CoinMarketCap. FTT’s price has since increased to $23 as of this writing.
Speculation began to circulate over the financial stability of Sam Bankman-trading Fried’s company Alameda Research after a leaked balance sheet was examined by CoinDesk and revealed that the trading firm possessed $5.8 billion worth of FTT tokens as of June 30. It was discovered that Alameda had $14.6 billion in assets and $8 billion in liabilities, including $7.4 billion in unreported loans.
Alameda is regarded as one of the largest whales in the cryptocurrency market, but a detailed examination of the figures mentioned in the CoinDesk report indicates that the company may be in a far more vulnerable position than observers would have anticipated.
Sam Bankman-Fried, a cryptocurrency billionaire, co-founded Alameda in 2017, two years before he launched his wildly popular cryptocurrency exchange, FTX. CZ further clarified that the selling of Binance’s FTT holdings should not be seen as an insult to a rival exchange.