Caroline Ellison, CEO of Alameda Research, which is owned by Sam Bankman-Fried, said she was prepared to buy Binance’s FTX (FTT) utility token at $22 per token.
@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!
— Caroline (@carolinecapital) November 6, 2022
The top executive responded to tweets from Binance’s chief Changpeng Zhao. He stated Binance’s aim to liquidate the FTT it holds, which together with BUSD totalled about $2.1 billion as part of the company’s exit from its portfolio investment in FTX.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Zhao promised to minimise market impact of the deal and expressed readiness to complete it within a few months. He stressed that the move was not aimed at a competitor, because Binance is important for sustaining the resilience of a nascent industry. The reason, he said, were “recent revelations”.
Binance always encourages collaboration between industry players. Regarding any speculation as to whether this is a move against a competitor, it is not. Our industry is in it’s nascency and every time a project publicly fails it hurts every user and every platform. 3/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Binance’s CEO may have had in mind CoinDesk’s investigation, which showed the close intertwining of FTX and Alameda Research.
Journalists obtained access to an internal document showing that out of Alameda’s $14.6 billion in assets as of June 30, $3.66 billion were “unblocked FTT”, $2.15 billion — “FTT in collateral.” This was the first and third-largest assets on the firm’s balance sheet.
“Most of the net capital in Alameda’s business is its own centrally controlled and air‑printed token FTX,” commented Swan Bitcoin CEO Cory Klippsten to the publication.
According to the exchange’s site, 202.05 million FTT are in circulation, valued at $4.45 billion.
In response to the publication, the Alameda Research CEO explained that the figures mentioned do not tell the whole story — the firm also has assets totalling more than $10 billion.
The document showed several large long positions without hedging assets. According to Ellison, amid the crypto winter Alameda Research has reduced its leverage.
— the balance sheet breaks out a few of our biggest long positions; we obviously have hedges that aren’t listed
— given the tightening in the crypto credit space this year we’ve returned most of our loans by now— Caroline (@carolinecapital) November 6, 2022
Bankman-Fried also addressed CoinDesk’s investigation. The head of FTX assured that the bitcoin exchange is strictly regulated, and its reporting is audited. The company values its customers and is grateful to those who continue to cooperate, and would be glad to welcome back anyone who returns.
4) And in the end you should do what you want, and trade where you want. We’re grateful to those who stay; and when this blows over we’ll welcome everyone else back.
— SBF (@SBF_FTX) November 6, 2022
Analyst firm Nansen reported that in the last 24 hours, Alameda Research sent about $257 million to FTX in USDC, amid notable outflows from the Bitcoin exchange.
Good accompanying tweet — https://t.co/d6WkXrpm6N
— Nansen Intern 🧭 (@nansen_intern) November 7, 2022
User theData_Nerd drew attention to the contraction of FTX’s Ethereum balance from 493,000 ETH to 162,000 ETH and the transfer of Alameda Research coins from other platforms (mostly Binance) to FTX.
The movement of $ETH is concerning, too.$ETH balance on @FTX_Official dropped from 493k on Nov 4 to 162k today by @cryptoquant_com.
Meanwhile, Alameda is transferring $ETH from other exchanges (mostly @binance) to FTX.
Within 24h, the total deposit is 26,6K $ETH ($42M) pic.twitter.com/qzL7Gg7eV2
— The Data Nerd (💙,🧡) (@theData_Nerd) November 7, 2022
FTX assured clients that slow Bitcoin withdrawals were due to limited network throughput. Regarding delays in executing stablecoin transfers from exchange deposits, management suggested waiting for the start of the business day of financial institutions.
3: Stablecoins: processing. Banks are closed for the weekend, though; USD <> stablecoin creations/redemptions might be slower until wires clear tomorrow, especially for some coins/chains.
— FTX (@FTX_Official) November 7, 2022
Users were divided in their assessment of FTX’s customer support. Some considered the platform’s statements that it was not experiencing problems a red flag.
Telling everyone how fine you are is the first red flag you are not
— dogterdogter (@dogterdogter) November 7, 2022
Others drew parallels with Celsius Network’s situation, when its CEO Alex Mashinsky misled customers about the true state of affairs before the start of the restructuring process.
In July 2021, FTX, following a Series B financing round raised $900m.
The deal provided the resources for the buyback of Binance’s shares for an undisclosed amount, which Binance invested in the platform in December 2019.
Later Bankman-Fried explained the “divorce” from Binance as a difference in approaches to doing business.
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