Binance and FTX clash over the price of FTX’s FTT token

FTX To Raise $1B To Maintain Its $32B Valuation
  • Binance is suspicious as FTX/Alameda rumors gain steam.
  • The conflict between Binance and FTX has been caused by the FTT token’s pricing.
  • Their comments and responses have generated reactions in the markets.

Changpeng Zhao “CZ”, CEO of Binance, launched a surprising roundhouse attack on rival exchange FTX on Sunday by announcing his business will sell its stakes in FTT. Notably, It is this token, whose trading price also acts as a proxy for FTX’s future prospects, that consumers of FTX may use to receive benefits and discounts on the site.

FTX’s sister business, Alameda Research, was seen to have a sizable investment in FTT on a leaked balance sheet. This led CZ to claim that Binance’s decision to dump the token was just a matter of caution. 

Further, regarding the famed algorithmic stablecoin that crashed this spring, CZ stated on Twitter, “Liquidating our FTT is merely post-exit risk management, learned from LUNA.”

The leaked financial statement also adds fuel to the opponents’ claims that an undesirable connection between FTX founder Sam Bankman-Fried’s firm and his exchange exists. SBF however claims it only represents a percentage of Alameda’s overall assets.  Nevertheless, as CZ hinted himself, there must be more to Binance’s choice to sell up his FTT tokens.

Conversely, the CEO of Alameda Research, Caroline Ellison, responded to CZ with the following:

The comments, and responses from the heads of FTX and Alameda Research, have generated two reactions from the market: 

  • a bank run on FTX platform-based assets.
  • a surge in open interest from investors on the price of the FTT token.

Due to this conflict, over the past week, the market has seen close to $1 billion in assets and token values leave known FTX and Alameda addresses.

To sum up, real-time developments in these situations make swift changes possible. Stablecoin balances on FTX are currently declining quickly as users shift their money away from the platform.

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Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

programmer & freelance writer