Binance CEO Changpeng Zhao said Binance will liquidate its remaining FTT tokens issued by the second-largest crypto exchange FTX on Sunday night Hong Kong time, after a report by crypto media outlet CoinDesk last Wednesday showed that FTX’s sister company Alameda Research may have solvency issues.

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Fast facts

  • “Due to recent revelations that have [come] to light, we have decided to liquidate any remaining FTT on our books,” Zhao said. Zhao added that since Binance withdrew from FTX’s equity last year, it has received US$2.1 billion worth of stablecoins BUSD and FTT.
  • According to a CoinDesk report last Wednesday, a financial report from Alameda Research showed the company’s debt accounts for about 54% of its assets as of June 30, while a significant portion of the company’s assets are FTT, suggesting that the company’s solvency may be problematic.
  • Yet Alameda Research’s CEO tweeted on Sunday morning to dismiss questions about solvency, saying “we have > $10b of assets that aren’t reflected there.”
  • “Liquidating our FTT is just post-exit risk management, learning from LUNA,” said Zhao in another tweet posted on Monday early morning Hong Kong time, after the liquidation announcement.
  • Zhao said that Binance will sell the tokens in a way that “minimizes market impact,” which could take several months.
  • “If you’re looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!” Alameda Research CEO Caroline Ellison tweeted to respond to Zhao’s announcement on liquidating FTT on Monday morning Hong Kong time.
  • Stablecoin reserves on FTX have fallen by 93% in the past two weeks and hit a low point in a year on Monday, according to a tweet by cofounder and CEO of CryptoQuant, Ki Young Ju. FTT’s price fell 5.31% in 24 hours, while trading volume rose 307.71%, as of 1 p.m. Hong Kong time, according to CoinMarketCap.
  • “We gave support before, but we won’t pretend to make love after divorce. We are not against anyone,” Zhao said on the Monday tweet. “But we won’t support people who lobby against other industry players behind their backs.” Zhao didn’t elaborate on his comment.
  • “…I respect the hell out of what y’all have done to build the industry as we see it today, whether or not they reciprocate, and whether or not we use the same methods. Including CZ,” said Bankman-Fried in a Monday tweet thread.
  • FTX did not respond to Forkast’s request for comment by press time.

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