Following rumors of the insolvency of the trading company Alameda Research, Binance through CZ announces the sale of tens of millions of FTT, the token of the FTX platform founded by Sam Bankman-Fried. Let’s go back to this case in detail.
Massive sale of FTT?
Changpeng Zhao, Founder and CEO of Binance, Announces sell the remaining FTTs following the sale of the shares that Binance had acquired in FTX. Indeed Binance had participated in a strategic investment in FTX in December 2019 and sold its shares for $2.1 billion in BUSD and FTT. In order to limit the impact of these sales on the CZ market announces spread sales over several months.
Yesterday, a transfer of more than 20 million FTTor 530 million dollars at the time of the events was carried out. It is very likely that this transfer was made by Binance to sell its FTT. A few hours after the course of the FTT token accused down nearly 10%.
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A disturbing report?
This sale comes as some rumors about the Alameda Research company are rife regarding its insolvency.
These rumors come on the heels of a Coindesk report published on November 2 which indicates that the majority of funds held by the trading company Alameda Research are FTT, the token of the FTX platform.
These two companies (FTX and Alameda Research) are both owned by Sam Bankman Fried (SBF).
Thus, it could be that the trading company Alameda Research is insolvent in the event of a sharp fall in the price of FTT as may have been the case for Celsius.
The report reveals that the trading company of Sam Bankman-Fried had $14.6 billion in assets as of June 2022 distributed like this:
- $5.8 billion from FTT;
- $1.2 billion from SOL;
- $3.37 billion in unidentified cryptos;
- $2 billion in investments in corporate securities;
- Another 2 billion in assets could not be identified.
According to another source hundreds of millions of dollars are also believed to be held in Solana ecosystem tokens such as Serum, Oxygen, MAPS or FIDA. All projects related to FTX and its founder SBF.
Alameda would therefore hold more than 100% of the FTT tokens currently circulating since the market cap of the FTX token is just over $3 billion according to data from CoinGecko.
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FTX and Alameda strike back
Caroline Ellison, CEO of Alameda Research, posted on her Twitter account that over ten billion in assets were not included in the balance sheet accessed by Coindesk which was only part of the company’s overall balance sheet.
A few notes on the balance sheet info that has been circulating recently:
– that specific balance sheet is for a subset of our corporate entities, we have > $10b of assets that aren’t reflected there
— Caroline (@carolinecapital) November 6, 2022
The price of the FTX token has been on a roller coaster in recent hourstossed up or down depending on the different announcements.
Following CZ’s statements, the CEO of Alameda Research responds to him and offers him to buyeter all FTT sold by Binance at $22 each. Probably to reassure investors and support the price of the token.
@cz_binance if you’re looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!
— Caroline (@carolinecapital) November 6, 2022
However, according to an analysis by Lookonchain, Alameda and FTX allegedly own “only” $300 million in stablecoin, which could not absorb the sale of the 22 million FTT at the current price..
Still according to the same analysis, nearly 98% of FTT tokens are held by 50 addresses and Alameda and FTX reportedly own 74.51% of all existing FTTsor 245 million FTT.
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Binance and FTX, an increasingly fierce rivalry?
FTX takes advantage of this bear market to carry out numerous buyback transactionslike Voyager Digital, and plans to raise $1 billion for future acquisitions.
Binance’s response was quick with the announcement of a potential spending of 1 billion dollars in acquisitions by the end of the year.
Rumors about the future deployment of a stablecoin from FTX were also heard, an additional risk for BUSD, the stablecoin of its competitor Binance.
Corridor rumors indicate a few weeks later that Binance would seek to acquire a bank.
Is Binance taking this opportunity to destabilize a competitor that is becoming increasingly important?
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Sources: lookonchainTradingView, Dirty Bubble Media