FTX CEO Sam Bankman-Fried Denies Insolvency Rumors as Binance Threatens to Liquidates FTT Token

Earlier, CZ threatened that Binance would liquidate all the FTT tokens in its book.

Sam Bankman-Fried is known for his two mega projects, FTX (crypto exchange) and Alameda Research (trading firm). It was recently reported that the Alameda balance sheet was full of the FTX token (FTT) which is issued by the exchange. This means that the foundation of Alameda is not based on independent crypto or fiat. According to reports, the company had $14.6 billion of assets as of June 30. It also had $3.66 billion of unlocked FTT, which is said to be its biggest asset. Also, the third largest asset found at the entry side of its accounting record was a $2.16 billion pile of FTT collateral. In its $8 billion of liabilities, there was a $292 million locked FTT. This mounted rumors of the solvency of the FTX crypto exchange over the weekend.

In response, Sam Bankman-Fried has dismissed the rumors stating that both FTX and the assets are fine.

“FTX has enough to cover all client holdings. We don’t invest client assets (even in Treasurys). We have been processing all withdrawals, and will continue to be,” he said.

The publication of Alameda’s balance sheet triggered a public war between Alameda CEO Caroline Ellison and Binance CEO Changpeng Zhao (CZ), who owns a good number of FTT tokens.

CZ threatened that Binance would liquidate all the FTT tokens in its book. Ellison responded that the company is ready to purchase any amount of FTT Binance would want to unload. However, CZ made it clear that they would rather stay in the free market. Sam Bankman-Fried in his latest statement has disclosed his wish to work with Binance for the ecosystem.

Alameda reportedly holds $3.37 billion of other cryptos as captured in its balance sheet. According to data, it holds $292 million of unlocked Solana (SOL), $863 million of locked SOL, and an additional $41 million of SOL collateral. Other tokens mentioned are MAPS, OXY, SRM, and FIDA. The company also has $134 million of cash and equivalents, as well as a $2 billion investment in equity securities.

“It’s fascinating to see that the majority of the net equity in the Alameda business is FTX’s own centrally controlled and printed-out-of-thin-air token,” said Cory Klippsten, CEO of investment platform Swan Bitcoin.

It is important to note that users who own FTT tokens on FTX get a discount on trading fees, earn rewards and also get an increased commission on referrals. The rolling program of buying back and burning tokens has been a strategy used to maintain the value of FTT. FTT is currently trading at $15.56.

Altcoin News, Binance News, Cryptocurrency news, News

John K. Kumi

Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.