Binance boss Changpeng "CZ" Zhao and FTX founder Sam Benkman-Fried are apparently in a heated argument. Is the crypto industry facing a new super crash?
FTX token: is a Terra Luna-like crash happening?
The native FTX token FTT is experiencing a severe crash. The reason: according to the CEO of Binance CZ, Binance has started liquidating its tokens due to "recent revelations". The FTT token is now down 22%.
FTX is using FTT as collateral for several loans, leading to fears of another major cryptocurrency crash if FTX gets a significant margin call.
Binance sells over $500 million worth of FTT tokens
Rumors of CZ's involvement started back on Sunday, November 6, when the FTX token plummeted. There are fears that the downturn will cause FTX to liquidate, which could lead to a Terra Luna-style "death spiral".
Most of FTX's crypto assets are reportedly tied to the $5.8 billion FTT token. Thus, a 15% price drop would reduce FTX's assets by approximately $2.1 billion before the token could recover.
The FTT tokens held by Binance are assets that the company received as part of its exit from its early investment in FTX. While this news may seem negative for FTT, CZ states on Twitter that it intends to liquidate the tokens in a way that "minimizes the impact on the market".
CZ also denies that a move is an act of aggression against a competitor. According to CZ, "every time a project fails publicly, it hurts every user and every platform." Interestingly enough, with all the instability in the crypto industry, the best crypto casinos on bitcoincasinos21.com still remain popular and offer super bonuses.
Is FTX now bankrupt?
Rumors are also now circulating that Alameda Research, the company behind the empire of FTX CEO Sam Benkman-Fried, is going bankrupt. A Substack article published on November 4 claims that the FTT token is doomed to fail - much like the Celsius CEL token.
The report outlines the similarities between the two tokens as well as the data in the chain. They show that "FTT ownership is highly concentrated". According to this, 93% of all tokens are stored at just 10 addresses.
This was reported by a leading analyst at CryptoCred. He provides an overview of last weekend's discoveries on the FTT token price development.
SBF in turn retweeted a post by Caroline Allison, the current CEO of Alameda Research as she attempted to control the damage around the speculation. Ellison claims the group holds assets worth more than $10 billion. They are simply not included in the recently released figures.
SBF is not worried
Aside from the retweet, SBF is not publicly concerned about the volatility, as the only other posts on November 6 focus on FTX's performance rather than bankruptcy fears.
Ellison responds directly to CZ on Twitter, stating that Alameda would be happy to "redeem all of its assets for $22 today" to minimize the impact on the market. According to Binance's CEO, that should have been the goal.
Despite this, the crypto community is of course constantly focused on the topic. Corey Swan of Swan Bitcoin, for example, asks if SBF has "$580 million" to buy back the tokens.
SBF is not really addressing user concerns, quite the opposite. Speaking about the "SEND" feature that allows users to send cryptocurrency to email addresses and phone numbers, it showed an available USD balance of only $6,311. This led users to joke that this is FTX's reserve balance.
Meanwhile, CZ confirmed that a transaction from an unknown wallet on Binance for 30 million FTT tokens worth approximately $584.8 million is "part" of Binance's liquidation of FTT tokens.
Crypto markets are reacting to the situation with a correction: Bitcoin is trading below $20,000 again at $19,760, and Ethereum is trading below $1500. Since yesterday, the capitalization of the global cryptocurrency market has fallen by almost 5% - further losses are possible.
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