FTX CEO Denies Insolvency Rumors
- FTX CEO Sam Bankman-Fried has denied all the insolvency rumors of his crypto exchange and stated that the assets of the exchange are fine and asked for co-operation with Binance CEO Changpeng Zhao.
- Zhao announced last week that his firm received over $2.1 billion in BUSD and FTT from FTX and it will be selling its holding after holding it for over a year.
- According to Coinglass, the open interest of FTT contracts has exceeded $220m, hitting a new high since November last year, doubling from yesterday.
Binance CEO and co-founder, Changpeng Zhao, announced last week that the crypto exchange received over $2.1 billion in Binance USD (BUSD) and FTX Token (FTT) following an investment that the world’s biggest crypto exchange had made in its rival exchange. This investment was made two years ago, when the Zhao-led exchange had incubated the Sam Bankman-Fried-led exchange.
According to a Twitter post from Binance CEO, the plan is to sell all the FTT holdings due to certain matters that have come to light. This created a selling emotion with regards to the native token of the FTX crypto exchange as the investors anticipated a price drop when the world’s biggest crypto exchange would sell its holdings.
Zhao, also known as CZ in the crypto space, stated that his exchange will try to initiate the sell off in a way that minimizes market impact. “Due to market conditions and limited liquidity, we expect this will take a few months to complete,” he said while adding that the tokens are being sold after Binance held them for over a year.
There was a speculation that FTX crypto exchange is set to go bankrupt after its FTT token would become useless from the sell-off. However, Bankman-Fried, also known as SBF in the world’s of crypto, stated that “FTX is fine. Assets are fine.”
“It’s heavily regulated, even when that slows us down. We have GAAP audits, with > $1b excess cash. We have a long history of safeguarding client assets, and that remains true today,”said SBF.
SBF asked for CZ’s support and stated that he wants them to work together for the benefit of the crypto ecosystem. Interestingly, it is crucial to note that the CEO of FTX’s sister firm Alameda, Caroline Ellison, stated that her firm will purchase all of the tokens at a price of $22 per coin, if Binance is willing to sell it to her firm.
Meanwhile, the entire war between the two exchanges was summarized by the host of the first daily Ethereum News Show, Omar Bham, who revealed that Binance had incubated the rival exchange two years ago and is now selling its FTT tokens due to lack of utility. CZ compared the FTT token with LUNA, which collapsed wiping off billions from the crypto market.
According to the Binance head, the sale is a part of risk management that the exchange has been planning for a long time. According to Bham, the FTT token had no utility and the third biggest exchange by trading volume, FTX, traded the token with USDT so that the FTT token was able to retain its value.
Following the announcement from CZ, the native token of FTX crypto exchange crashed and according to Coinglass, the open interest of FTT contracts has exceeded $220m, hitting a new high since November last year, doubling from yesterday.