1300 770 441contact@imperialwealth.com
Imperial WealthImperial Wealth

Binance’s CZ Vows to Dump Its Entire Stash of FTT Tokens

08 Nov 2022

Mitchell Nixon

author_avatar

Binance CEO Takes Action Amid FTT Token Controversy

CEO of Binance, Changpeng Zhao (CZ), has asserted that the company will be slowly, but surely, offloading and liquidating its holdings in FTT, the native token for its rival exchange, FTX. 

A somewhat “exchange war” has ensued, despite both parties ensuring it is not.

What really brought the war of words to light was CZ’s 

The entire Twitter thread can be read below:

As per the above, CZ took to Twitter to state that they will be liquidating their entire FTT position, learning from their mistakes from LUNA. 

So, why was CZ worried? What were the rumours?

FTX and Alameda Research: A Deep Dive

Sam Bankman-Fried was actually idolised in this space for a long time. He became infamous for hugely successful investments such as the popular Solana (SOL), different arbitrage trading and of course founding both FTX, one of the globe’s largest centralised cryptocurrency exchanges, and Alameda Research.

Additionally, throughout 2022, Sam and FTX had been leading huge fundraising efforts for new projects, which included aiding $150 million in fundraising for Aptos, as well as $300 million in fundraising for Sui. This extended to his ability to attempt to bail out those projects that suffered as a result of the LUNA capitulation carnage, bailing out BlockFi for $240 million, bidding on Voyager’s assets and considering bailing out Celsius.

However, recently there were a few events that can infer that a few cracks have begun to appear. Out of nowhere, co-CEO of Alameda Research, Sam Trabucco, stood down from his roll:

Additionally, a few weeks later, Brett Harrison, president of FTX, announced he was also standing down:

This was all around the time that FTX was also facing a securities regulator probe, looking into whether crypto-earn offerings are securities, and that Texas was asserting that FTX should not be allowed to buy Voyager assets.

However, it was actually the discovery of Sam’s underlying ambitions that truly led to the current FUD. 

A copy of the still in-progress Digital Commodities Consumer Protection Act (DCCPA), which outlines how the Commodities Futures Trading Commission would regulate the crypto industry, was uploaded to GitHub, and Sam has seemingly been supporting the bill. 

This created huge backlash from the community, with infamous BitBoy taking to Twitter to exclaim that “he’s coming after DeFi and Peer to Peer transactions”. Additionally, Erik Voorhees was able to interview Sam on the matter which led to huge scrutiny amongst the cryptocurrency community, causing widespread damage to Sam’s image, and ultimately causing the widespread FUD around FTT and FTX at the moment, once coupled with the other points mentioned prior. 

Things started to really heat up last Wednesday when Alameda’s balance sheet was shown, in which Cory Klippsten described “the net equity in the Alameda business is actually FTX’s own centrally controlled and printed-out-of-thin-air token”

Binance CEO CZ Dumps FTT tokens after Sam Bankman's arrest

This is essentially what spiralled the FUD. Allegations of FTX insolvency began to surface, as well as Alameda becoming insolvent, with great concerns arising from the review of the balance sheet. 

This is where we finally saw the massive $584 million worth of FTT tokens transferred to Binance, in which CZ confirmed that it was Binance wanting to liquidate its position. It was here that CZ then indirectly referred to Sam’s lobbying, claiming that he “won’t support people who lobby against other industry players behind their backs”.

Future of FTT and FTX?

As a result, FTT has dumped in the last week from around $26.5 to $22.17 as of writing, down around 16%.

As a result, Sam was left to defend himself, in which you can read the thread below:

Seemingly, this is a situation whereby there are a lot of rumours floating around, however usually with smoke, there is fire, and this was clearly evident in the capitulation events of 2022 with LUNA, Celsius and Voyager (amongst others). 

The overall chances of FTX being insolvent are very slim, however, as there is smoke, the space must proceed with caution. 

Conclusion

The recent developments between Binance and FTX underscore the volatility and complexity of the cryptocurrency market. As seen with the controversies around DeFi regulation, FTT token, and market rumours, navigating this space requires expertise and strategic planning.

Whether you’re looking to capitalise on trading opportunities, explore Bitcoin mining in Australia, or understand the potential of crypto mining hosting, having the right knowledge and tools is crucial. Our cryptocurrency trading course offers expert guidance, real-time market insights, and actionable strategies to help you succeed in this fast-paced industry.

Don’t leave your crypto future to chance. Book your free consultation today and gain the skills to make informed decisions, avoid pitfalls, and thrive in the ever-changing crypto landscape!