By Richard Hines
After 20% of its token fell, one of the largest DAOs, Decentralised Autonomous Organization, BitDAO, became involved in a situation with the FTX corporation. FTX was accused of violating a BIT holdings agreement, but a representative from FTX came out to rectify the situation.
Breach Of Agreement
Communities supporting BitDAO demanded that FTX show evidence that they still possess the slated amount of BIT tokens, the BitDAO native token. These tokens were purchased at the end of last year after 3.36 million FTX native tokens (FTT) were converted to BIT tokens.
According to the terms of the agreement reached between FTX and BitDAO, FTX was required to keep these tokens for a minimum of three years.
These agreements, however, were broken when the FTX was reported to have sold off these tokens. The BitDAO committee is questioning the breach of contract because the three-year minimum agreement was not met. There is no specific report, but the BitDAO committee is intent on seeing proof of funds from FTX Alameda.
The BitDAO committee is worried about this event and speculate that this could be a move by FTX to liquidate all of its tokens in order to protect its FTT tokens.
The price of FTT has recently been influenced by a series of events that took place this week. Binance liquidated its FTT tokens first, and now the price of FTT has dropped 40% to $15 in the last week.
Drastic Actions Would Be Taken
This situation of breach of contract and FTX Alameda drama arose from a Coindesk report exposing the large amount of FTT tokens on FTX balance sheet.
In relation to this report, the first course of action was Binance liquidating all of its FTT holdings.
However, BitDAO has made firm plans that if the situation with FTX worsens, they will sell off all acquired FTT tokens. They communicated this threat in a tweet.
Caroline Ellison, the Research CEO of FTX, responded to the tweet by denying any claim of liquidation and breach of agreement as their actions, and stated that they will provide evidence of funds still intact.
Zhou from BitDAO appreciated this, thanking Caroline for the timely response, stating that this instills a great deal of confidence in the BitDAO and fosters greater trust between both partners.
Caroline’s response has had a significant impact on the BitDAO community, as all nerves appear to have calmed down. The BIT token has also increased by slightly more than 20% since the previous day.