Binance to sell FTT tokens – Is a next Terra Luna crash around the corner? 

• Binance decided to sell FTT tokens after the discovery of the Alameda Research leaked balance sheet.
• To protect the market, Alameda Research’s CEO plans to buy an undisclosed amount of Binance’s FTT tokens for $22 per token. 

In a recent tweet, Binance CEO Changpeng “CZ” Zhao disclosed that he would sell off the FTT tokens in his possession. He explained that Binance received about $2.1 billion in the form of BUSD and FTT tokens last year. The amount was received while the cryptocurrency firm was exiting its partnership with FTX, Alameda’s sister company. FTX and Alameda Research are top exchange and trading platforms owned by Sam Bankman-Fried. Despite the explicit explanation made, the Binance boss did not state the exact amount of FTT tokens remaining on his books. 

He further disclosed that the action would be carried out gradually to help minimize market impact. CZ wrote:

…Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books. We will try to do so in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete.

In response to CZ’s tweet, Caroline Ellison of Alameda Research tweeted that her company’s financial health is stronger than the leaked balance sheet. In addition to that, she proposed to buy the FTT tokens from Binance for $22 each.

@cz_binance if you’re looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!

— Caroline (@carolinecapital) November 6, 2022

CZ earlier mentioned that the sale of Binance’s FTT token will be in batches over the next few months to prevent market impact. However, reports from Etherscan showed an address moving 23 million FTT, worth approximately $530 million, to a Binance exchange wallet. Subsequently, the price of FTT declined over 24 hours to $22.02, the lowest price ever recorded since June. At the time of writing, the value of FTT is $22.58. 

Why is Binance planning to sell its FTT tokens?

Before CZ’s announcement, a balance sheet belonging to Alameda Research was leaked. The balance sheet revealed that Alameda had $5.8 billion of FTT tokens, as recorded on June 30. It also shows that Alameda currently has $14.6 billion in assets and $8 billion in liabilities, including $7.4 billion in unidentified loans. Perhaps CZ feared FTT would take the path of Terra’s Luna Crash. 

After the circulation of the leaked balance sheet, the CEO of Alameda Research gave a few notes about the info. She said the circulating balance sheet is meant for the company’s corporate entities and that over $10 billion of assets were not reflected there. She buttressed that some hedges were not listed and a gross amount of the loans had been settled. 

The Binance boss also tweeted that selling off their FTT tokens has nothing to do with any contending exchange. He said:

Regarding any speculation as to whether this is a move against a competitor, it is not…We typically hold tokens for the long term. And we have held on to this token for this long. We stay transparent with our actions.