Binance CEO Changpeng Zhao said on Sunday that the cryptocurrency exchange is liquidating FTT assets, the native token of rival exchange FTX. Subsequently, he signaled that he would buy another altcoin with the proceeds from the sale. Here are the details…
Proceeds from the sale of FTT will go to BNB
Koindeks.com As we have also reported, we entered the new week with quarrels between the CEOs of Binance and FTX, one of the largest cryptocurrency exchanges. Binance CEO Changpeng Zhao announced that they created an “early exit strategy” by selling their FTTs. The reason behind the sale of his FTTs is not to have trouble in the event of the bankruptcy of FTX and Alameda Research regarding Sam Bankman Fried.
Binance received funds in FTT last year as part of its exit from an early equity position in FTX it had held since 2019. FTX had acquired Binance’s stake in the company for $2.1 billion through a mix of FTT and BUSD. CZ said the liquidation is expected to take several months to complete due to market conditions and limited liquidity. He also added that they are trying to minimize the market influence on FTT.
After CZ said he would sell FTT for about $584 million, a follower said, “You can now buy $500 million of BNB.” Changpeng Zhao also said “yes”, signaling that the proceeds from this sale will be transferred to BNB. As it is known, BNB is the local cryptocurrency of Binance.
What had happened?
Recently, CZ reacted to an investigation into the financial health of FTX by crypto detective Mike Burgersburg published on Nov. Burgersburg was based on a report from Coindesk that showed that FTX and Alameda, led by Sam Bankfried, are now two different entities. However, it turned out that FTT tokens dominate Alameda’s balance sheet. Burgersburg used the following terms:
Our sources indicate that these holdings are worth several hundred million dollars. The firm’s solvency is based on crypto tokens issued by interested parties. This may sound familiar, as it is the exact model used by Celsius Network and many other crypto firms to create billions of dollars out of nothing. We call this the “flywheel diagram”.
This created panic amid FTT owners who sold their assets on the idea that FTX had gone bankrupt without fail. In less than 48 hours, FTT dropped over 16 percent. At the time of writing, the coin is changing hands at $22.01, down 5%.