Binance vs. SBF: Is FTX (FTT) in trouble?



Rumours of FTX exchange being insolvent are making the rounds on Crypto Twitter.

Speculations about the crypto exchange being insolvent stem from a recently acquired balance sheet that claims the majority of Alameda's funds are closely linked to FTX's FTT token.

FTX CEO Sam Bankman-Fried has, however, denied such allegations, claiming that his exchange is highly regulated.

FTX insolvency rumours spread on Crypto Twitter

Recent reports, including an allegedly leaked balance sheet from Alameda Research, have revealed striking details about FTX and their FTT cryptocurrency.

The trading firm's biggest asset was revealed to be $3.66 billion in locked FTT, while $2.16 billion worth of FTT is the third largest collateral. It may seem that about $5 billion is tied to FTX's FTT. If Alameda were to fall, it may drag FTX along with it.

Caroline Ellison, CEO of Alameda Research, has however denied such rumours.

Ellison later tweeted about how the balance sheet that has been making rounds on Twitter is only a "subset of our corporate entities" and does not include details concerning another set of $10 billion worth of assets.

The CEO of FTX crypto exchange, Sam Bankman-Fried, has also issued similar statements, referring to such speculations as "a bunch of unfounded rumours."

SBF later claimed that "a competitor" is trying to spread false rumours about FTX and has assured its users that the exchange is financially sound and is not battling any financial crunch at the moment.

FTX insolvency rumours gained further traction soon after a media outlet named Dirty Bubble Media uploaded a detailed substack post outlining similarities between FTT and CEL, the native token of bankrupt crypto lender Celsius Network.

The post detailed how FTTs' ownership is highly concentrated, with 93% of the total tokens held by only 10 addresses.

The substack post later adds:

Have an opinion on this article? We'd love to hear it!
A scan of the blockchain confirms that FTT ownership is highly concentrated, with 93% of the total tokens held by only 10 addresses. Even more concerning, the blockchain analytics firm Messari shows that there are only 180–200 addresses actively transacting in FTT tokens.

Binance liquidates FTT token holdings amid rumours

Speculations concerning FTX compelled Binance's CEO Changpeng Zhao to liquidate Binance's FTT holdings with immediate effect.

CZ took to Twitter to inform the Binance community about the move, stressing the fact that his decision to liquidate Binance's FTT tokens was influenced by "the recent revelations that have come to light."

CZ later tweeted that he would try to sell tokens in a way that "minimizes market impact," further stating that it would take nearly 2-3 months for the entire process to reach completion.

Despite such revelations, Alameda seems unaffected by such rumours and has issued a counter-proposal to Binance.

Alameda's Caroline Ellison jokingly tweeted that her company would be happy to purchase all of Binance's FTT holdings at a price of $22 per token.

Get the latest on Bitcoin, Ethereum, Luna 2.0 and Shiba Inu.

This Article's Topics

Explore new topics and discover content that's right for you!

Planet Crypto
Have an opinion on this article? We'd love to hear it!