Binance, the world’s largest crypto exchange, has decided to liquidate all the remaining $FTT on their block, according to a Twitter announcement by CEO Changpeng Zhao.
The move follows Binance’s exit from FTX equity in 2021, after which the company received almost $2.1 billion equivalent in cash ($BUSD and $FTT). FTT is the native token of the crypto derivatives platform FTX, launched on May 8, 2019.
However, in light of recently emerging disclosures, Binance has decided to liquidate any remaining $FTT on their blocks. CZ said:
“As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion equivalent in cash (BUSD and FTT). Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books.”
However, CZ has reassured the industry that the company will navigate this decision in a way that least affects the market. In light of the prevailing hostile conditions in the market and concerns about limited liquidity, the exchange expects the process to go on for several months. Citing Binance CEO:
“We will try to do so in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete.”
Liquidating all remaining $FTT means that all open orders will be canceled, with all users being subjected to the same liquidation protocols (smart liquidation). As the largest crypto exchange in market cap, Binance has always set the pace for industry players, users, and entities, encouraging collaboration for the good of community members.
Therefore, the decision to liquidate all the remaining $FTT is surprising, as it challenges the company’s reputation, given that Binance avoids completely liquidating a user’s position whenever possible. Nevertheless, CZ has put off any speculation that the move is an action against a market rival, saying:
“Regarding any speculation as to whether this is a move against a competitor, it is not.”
As part of the company’s liquidation protocols, for any trader cleared through forced liquidation instead of an order issued by the user himself, a liquidation fee is charged on the amount liquidated only, not the notional value of the position.
Cognizant that the crypto industry is still nascent, CZ articulated that when ill befalls any organization in the crypto market, the whole industry feels the consequences, not just the company in question.
“Our industry is in its nascence, and every time a project publicly fails, it hurts every user and every platform.”
Noteworthy, Binance has held the FTT tokens for the long term, as is the case for other tokens, and always maintains a certain level of transparency for the industry’s good. Nonetheless, despite this move being for the good of Binance, it will undoubtedly affect FTX Company, adding salt to the injury of the company’s recent insolvency rumors.
Alameda CEO Bids To Buy Binance’s $FTT
Responding to CZ’s post, Alameda CEO offered to buy the $FTT that Binance is looking to offload at $22 each. She said:
“@cz_binance, if you’re looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!”
According to Caroline, her trading firm’s financial position is better than what was reflected in the recently circulating balance sheet.
So far, this has to be the most significant blow on FTX, which looked so strong recently, and community members are shocked to see it in the crosshairs. While spreading the $FTT unload process over several months is a tactical move by Binance with hopes not to affect the price of FTT that much, the token’s price has reacted to the news.
Shortly after the announcement, FTT price went down by 0.8% to trade at $23.01 at press time on CoinGecko.