Binance Set to Liquidate Its Entire Position in FTX Tokens – Decipher

Binance Set to Liquidate Its Entire Position in FTX Tokens – Decipher

Binance CEO Changpeng “CZ” Zhao said on Sunday that his cryptocurrency exchange is liquidating its holdings of FTT, the native token of rival exchange FTX.

Zhao referred to “recent revelations that have come to light,” but did not elaborate publicly or respond to a request for clarification from Decrypt.

The decision follows weeks of criticism directed at FTX founder and chief executive Sam Bankman-Fried for regulatory proposals he outlined in a blog post that recommended restrictions on DeFi. It has since pledged to review its regulatory position.

Binance received the funds from FTT as part of its exit last year from an early position in FTX it had held since 2019. FTX had bought out Binance’s stake in the company through a mix of 2.1 billion dollars from FTT and BUSD – Binance’s native stablecoin. exchange – according to a statement from Zhao.

CZ said the liquidation is expected to take a few months due to market conditions and limited liquidity. It will also be done in a way that tries to minimize the market’s impact on the FTT, he said.

Either way, FTT is down 9.5% over the past day to $23.03 from $25.55, according to CoinGecko, bouncing off a low of around $22 on Sunday.

On Saturday, 22,999,999 FTT, worth $584 million at the time, were transferred from a wallet to the Binance exchange, according to Etherscan. This equates to 17% of TTF’s circulating supply, according to CoinGecko. CZ confirmed the transferred funds were part of the exchange’s decision to liquidate its position in FTT.

Zhao said in a Twitter thread on Sunday that the decision to liquidate his position in FTT was not a blow to his competitor. However, one user on Twitter suggested that the sale could impact loans secured by the token.

Caroline Ellison, managing director of Bankman-Fried’s crypto trading firm Alameda Research, offered to buy Binance’s remaining FTT for a fixed price of $22 if Zhao also sought to “minimize market impact.” of this decision.

Binance was the top exchange by FTT volume over the past day. In the past 24 hours, Binance accounted for 6.3% of FTT’s trading volume or $95.4 million, according to CoinGecko.

Binance was an early investor in FTX and although the sum of the initial investment was not disclosed, Zhao had said Forbes at the time of Binances’ release, “We’ve seen huge growth from them, we’re very happy with it, but we’ve pulled out completely.”

On Sunday, CZ said his company usually holds long-term tokens, but Binance held its position in FTT too long.

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