Recently, the CEO of Binance, Changpeng Zhao made it clear that the exchange is planning to liquidate its position in the FTT token of its rival exchange, FTX. According to Zhao, Binance had planned on making this decision solely on the basis of previous revelations. As per the revelations in the reports, it was known that FTX’s sister company, Alameda, had assets worth approximately $14.6 billion.
As a result of Binance’s exit from FTX the previous year, the exchange actually ended up receiving a total of $2.1 billion in cash. Considering the recent findings, Binance decided to liquidate any leftover FTT in its books. However, the current market situation is still pretty much uncertain. Thus, the liquidation of tokens would be done in the coming few months. Binance fully supports and encourages collaboration and ventures between many players within the market. But in cases of any possible failures, the results end up hurting both users and the platform.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Possibility of FTX’s Bankruptcy After the Decision of Binance
The exchange’s largest asset turned out to be a whopping $3.66 billion in locked FTX. Furthermore, the third-largest asset is revealed to be worth $2.16 billion worth of FTT. Considering the company has more than $5 billion worth of FTT, this has raised several questions about the risk or possibility of bankruptcy.
Zhao, in another statement, mentioned how Binance believes that liquidating its FTT is simply post-exit risk management. However, Binance will sell the tokens in such a way that the market impact is a bare minimum. This would eventually take a few months though. Stablecoin reserves on FTX have witnessed a drop of 93% over the course of the previous week and have hit the lowest point in a year.
FTT’s price went down by roughly 5.31% in the last 24 hours. At the same time, the trading volume rose by 307.71%. In a big whale movement, FTT worth over $584 million was transferred to Binance. This could lead to a big blow for the token. Zhao even stated that they did their best when it came to supporting others. But there is little to no reason of being against anyone at this point.
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 22,999,999 #FTT (584,818,174 USD) transferred from unknown wallet to #Binancehttps://t.co/Nm2jz9MKW0
— Whale Alert (@whale_alert) November 5, 2022
Keeping this in mind, it was even stated how Binance would not really support anyone who tries to sabotage other industry players behind their backs. After Binance’s recent announcement, the price of FTT experienced swift fluctuation. At the time of writing, the token is trading at $22.3.
