Investors are following Binance in removing tokens from FTX
Mass Exodus after Binance
FTX is once again under the microscope in the cryptocurrency industry. This time, it’s due to large scale withdrawals after Binance CEO Changpeng Zhao began liquidating his company’s FTT tokens.
According to Nansen data, weekly stablecoin outflows from FTX have reached $451 million. This is in contrast to Binance, which has seen net inflows of more than $411 million over the same period.
Some of the stablecoin withdrawals were executed by Jump Trading, which has transferred about $40.4 million worth of tokens. However, the exact reason for the mass exodus is not clear.
FTX has been embroiled in controversy before, with accusations of wash trading and market manipulation. However, the exchange has always denied these claims.
It remains to be seen how this latest development will affect FTX in the long run. For now, it seems that investors are not taking any chances.
Not Just Stablecoins leaving FTX
Stablecoins are not the only thing to leave FTX. An additional $94 milion worth of crypto including $73.9 million in Ethereum, $1.1 million in Fantom, and $1.4 million in Chainlink was transfered from FTX to Nexo.
There were more large withdrawals of about $34.5 million in ETH that went from FTX to Coinhako,$23 Million in staked ETH that went to an unidentified wallet, and another $15.9 million that went to Nexo as well.
The mass exodus may be due to reports about Alameda Research which is the trading firm founded by SBF. It has been reported that Alameda Research held as much as $5.8 billion in the exchange’s native FTT token—$3.66 billion in “unlocked FTT” and $2.16 billion in “FTT collateral”.
The large amount of FTT tokens held by Alameda Research may have caused some investors to worry about a potential liquidity crisis if the markets were to move against the FTT token, causing its value to drop.
Binance: No “Pretending to make love after divorce”
After the reports hit,Changpeng Zhao, Known as “CZ” went on Twitter to make an announcement that he would be selling all of Binance’s remaining FTT. He stated that this was due to the recent revelations and that he “won’t support people who lobby against other industry players behind their backs.”
This move by CZ could be seen as a way to distance himself and Binance from any potential scandal that may arise from these reports. It is also unclear if Binance had any prior knowledge of the amount of FTT tokens that Alameda Research was holding.
At the time of writing, the FTT token is down over 5% and is trading at $2.54. It remains to be seen how this situation will play out and if any more exchanges will follow suit and sell off their FTT holdings.
SBF Replies
Sam Bankman-Fried stated that the concerns of a liquidity crisis are unfounded and nothing more than rumors. The boss of FTX cited Alameda Research CEO Caroline Elison, she stated “that specific balance sheet is for a subset of our corporate entities” Both Bankman-Friend and Ellison go on to state there is over $10Bn in assets “that aren’t reflected there.”
SBF kept a cool head when speaking and noted how FTX was able to smoothly handle the billions of dollars worth of transactions. In response to Binance Ellison stated that Alameda Research would be willing to offer over-the-counter purchases of the exchanges remaining FTT for $22 each to “minimize the market impact”
