FTX-Binance Drama Stirs Trouble In Crypto Paradise! Should You Be Worried As An Investor?
A recent report showed that FTX's sister company, Alameda Research, might soon face solvency issues
Binance now plans to sell $600 million worth of assets on the open market in the next 2 months
A recent report showed that FTX’s sister company, Alameda Research, might soon face solvency issues.
This has led the world’s leading crypto exchange, Binance, to liquidate all of its FTT holdings which the FTX exchange has issued. As per the report, Alameda Research has a debt of nearly 54% as of June 30, most of which is FTT, indicating the firm’s insolvency might pose an issue later on.
Alameda Research’s and FTX’s CEO, Sam-Bankman Fried, came forward to assure everyone that Alameda Research still has more than $10b of assets that are still safe, and the situation is relatively under control.
However, on November 7, Binance CEO “CZ” claimed that they are liquidating all of their FTT holdings. Their stance is that this move was made in the interest of risk management, as they have learnt their lesson from the Terra crash earlier this year.
Alameda Research CEO Caroline Ellison responded to this by saying:
“If you are doing this to minimize the effect on the crypto market, then the firm is ready to buy all the tokens at $22.”
FTX Liquidation To Be Gradual, Will Not Affect Markets
All this began a few days ago when Binance CEO Changpeng Zhao claimed to have received $2.1 billion in BUSD and FTT tokens, as it was one of the earliest investors. The firm now plans to sell $600 million worth of assets on the open market over the next two months.
On the other hand, huge stablecoins have moved from wallets to Huobi, Okx, Kucoin and other significant exchanges after Binance announced that it would liquidate its FTT holdings.
However, as of now, the FTX Exchange has faced no issue with liquidation or existing debt, indicating that Binance’s move to sell FTT should not affect regular investors.