Following a recent revelation regarding the balance sheet of Alameda Research, CEO of Binance, Changpeng Zhao “CZ” has said he will trade its remaining FTT (the native token of rival platform FTX exchange).
According to CZ, this move to liquidate its position was not an attempt to take a shot at its rival. Furthermore, he said every time a project publicly fails in the nascent sector it affects all players. It will therefore conduct the liquidation in a manner that will reduce the impact on FTT and will be completed in a few months due to the prevailing market conditions.
However, Binance’s move to dump its FTT positions on the market could negatively impact loans backed by the token. Though it’s not exactly clear how much of these FTT tokens CZ is planning on selling, Binance received roughly $2.1 billion USD equivalent in cash in the form of BUSD (Binance’s stablecoin) as part of its exit from FTX equity last year.
According to an on-chain analysis by Etherscan, an address moved 23 million FTT worth about $530 million to a Binance wallet on Saturday. Interestingly Binance is an early investor in about 197 million FTT tokens worth $5.1 billion in circulation.
While responding to the said report, Alameda’s CEO Caroline Ellison said the firm’s financial position wasn’t properly reflected in the balance sheet. Caroline said FTX has an additional $10 that was not listed in the balance sheet and has also cleared most of its loans since July. Additionally, Caroline offered to buy Binance’s FTT holdings for $22 each.
Concerns over Alameda’s Balance Sheet
CZ’s announcement somewhat gives credence to rumors regarding Alameda’s balance sheet.
The trading firm founded by Sam Bankman-Fried has massive exposure to the FTT token. The reported leaked balance sheet shows that Alameda owned $5.8 billion of FTT tokens as of the end of June. It has $14.6 billion in assets and $8 billion in liabilities.
Meanwhile Alameda Research and sister firm FTX Ventures have jointly supported over 150 crypto firms including Non-Fungible token (NFTs) marketplace Magic Eden and Crypto bank Anchorage Digital.