By Richard Hines
On Sunday, Binance CEO Changpeng CZ Zhao informed the public that the Binance cryptocurrency exchange will liquidate all of its FTT tokens, which are the native cryptocurrency token of the FTX exchange.
CZ Uncovers Some Findings On FTX
Chanpeng hinted at new findings about the FTX exchange that were just uncovered, but did not go on to provide specifics about these findings.
This decision stemmed from days of criticism directed at FTX founder Sam Bankman-Fried for publishing regulatory suggestions via a blog. This proposal, which was made public via a blog post, described DEFI regulations. This move was made in order to revise his stance on regulations.
Binance received funds from the FTX market as reimbursement for closing a position it had held since 2019. The FTX exchange paid $2.1 billion for Binance’s interest in the company using Native tokens from both exchanges (Binance USD and FTT). A statement from Changpeng confirmed this purchase.
Due to the current state of the market and insufficient liquidity, this liquidation is expected to run its course in a few months, as anticipated by Changpeng. Binance is also very cautious to carry out this liquidity in such a way that it has no effect on the FTT token.
However, despite this caution, the price of FTT fell by more than 9%, from $25. And according to Coinmarketcap, it closed at a price of $22 on Sunday.
Liquidation Already In Progress
A huge transaction was spotted on Saturday, moving funds from an unidentified wallet to the Binance exchange. This transaction involved $584 million in FTT tokens being deposited to the Binance exchange from a report acquired.
This transaction’s value was calculated to represent over 15% of the FTT token’s overall circulating supply.
This transaction was a valid portion of the liquidation strategy and agreement to liquidate its stake, according to Chanpeng “CZ” confirmation. But he made it very clear that the move to liquidate its position was not intended as a blow to the FTX exchange. On Twitter, a user made the suggestion that selling token-related loans might have an impact.
However, the FTX exchange made their move when Carolline Ellison, the Chief Executive of FTX, offered to buy the leftover Binance FTT holdings at a price of $22 per each one, provided Changpeng was genuinely sincere when he stated he is cautious about minimizing the impact the liquidation would have on FTT.