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Twitter feud between Binance’s CZ and FTX’s Sam Bankman-Fried sends FTT cryptocurrency below US$22

  • Zhao Changpeng said a decision to sell US$530 million in holdings of FTT was triggered by ‘recent revelations’ amid rumours about FTX’s balance sheet
  • FTT continued to fall on Tuesday after Sam Bankman-Fried dismissed ‘false rumours’ and said, ‘FTX is fine. Assets are fine’

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Sam Bankman-Fried, founder and CEO of FTX Cryptocurrency Derivatives Exchange, speaks during the Institute of International Finance annual membership meeting in Washington on October 13, 2022. Photo: Bloomberg
Bloomberg

Simmering tensions between the crypto industry’s two richest executives are spilling over into the already battered digital-asset market.

On Sunday, Zhao “CZ” Changpeng, the billionaire chief executive of Binance Holdings took to Twitter to announce plans to sell his company's roughly US$530 million holding of FTT, the native token of Sam Bankman-Fried’s FTX. Binance and FTX run the world’s largest and seventh-largest crypto exchanges.

Zhao said his decision was triggered by “recent revelations”. In a November 2 article, news site CoinDesk said much of the balance sheet of Bankman-Fried’s trading house Alameda Research is comprised of the FTT token. FTT’s price fell in high trading volumes after Zhao’s announcement and traders rushed to withdraw funds from FTX.

Caroline Ellison, CEO of Alameda, responded on Sunday to the CoinDesk story by saying “that specific balance sheet is for a subset of our corporate entities, we have >US$10b of assets that aren’t reflected here”. Ellison later offered to buy all the FTT tokens from Binance at a price of US$22.

That price level has now been breached. The FTT token tumbled below US$18 in Singapore on Tuesday, according to data from CoinGecko. Other cryptocurrencies like bitcoin and ether fell to session lows around the same time that FTT moved lower.

Prices of most cryptocurrencies fell on Monday, even as equities advanced. Solana, a token backed by FTX and Alameda, was among the biggest decliners. FTT’s trading volume surged to the highest in more than a year, which “suggests market makers are working overtime to maintain liquidity amid high selling pressure”, Clara Medalie, head of research at analytics firm Kaiko, wrote in an email.

“Overall, FTT is a relatively illiquid token on open markets, so Binance’s plans to liquidate all FTT tokens they hold is quite a significant market event,” she added. “Alameda will likely dedicate considerable resources to ensure the price of FTT doesn’t crash.”

Zhao did not specify what “revelations” he was referring to. A Binance spokesman declined to comment. FTX said on Monday it was “churning through” bitcoin withdrawal transactions, making some changes to “help speed it up”.

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