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The bitcoin price has crashed to around $20,000 per bitcoin, down from almost $70,000 a year ago. Ethereum
Now, the billionaire chief executives of the major crypto exchanges Binance and FTX, Changpeng “CZ” Zhao and Sam Bankman-Fried, have begun a public war of words after what CZ called “recent revelations” about the health of FTX’s balance sheet—warning he’s learned from the terra luna meltdown.
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Bitcoin, ethereum and other major cryptocurrenices have suffered an almighty crash this year, wiping … [+]
CZ sent shockwaves through the bitcoin and crypto community when he announced Binance was liquidating its holdings of FTX’s cryptocurrency FTT, a rival to Binance’s own much larger BNB
FTT has a market capitalization of $3 billion compared to BNB’s $53 billion, according to CoinMarketCap data. Both FTT and BNB are used as so-called exchange tokens that give users discounts on their respective platforms.
CZ did not specify the value of the FTT cryptocurrency he planned to offload, but it’s thought Binance could hold around $500 million worth of FTT following the sale of its FTX stake last year, according to a Bloomberg report that cited anonymous sources. The price of FTT has crashed by just over 10% during the last week.
On Saturday, almost $600 million of FTT was transferred from a wallet to Binance’s exchange, according to Etherscan data. CZ confirmed via Twitter the transfer was “part of” Binance’s FTT exit.
“Liquidating our FTT is just post-exit risk management, learning from luna,” CZ posted to Twitter on Sunday, pointing to “recent revelations that have came to light.”
Last week, the crypto blog Dirty Bubble Media drew parallels between Sam Bankman-Fried’s trading company Alameda Research and the bankrupt crypto lender Celsius following a Coindesk report that alleged Alameda’s balance sheet is being propped up by FTX’s native token, FTT.
Following its collapse, Celsius has been accused of artificially inflating its balance sheet by manipulating the price of its cel cryptocurrency.
“Due to market conditions and limited liquidity, we expect [the sale of Binance’s FTT] will take a few months to complete,” CZ said, adding the sale would be done in a way that “minimizes market impact.”
Caroline Ellison, CEO of Alameda, hit back against CZ’s suggestions, telling him: “If you’re looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22.”
Ellison earlier posted that Alameda’s reported balance sheet is “for a subset of our corporate entities” and the company has more than “$10 billion of assets that aren’t reflected there.”
The twist is the latest in a saga that began last month when Bankman-Fried was accused of serving his own interests with regulatory proposals he’d put forward—and has since rowed back.
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The price of FTX’s FTT has halved over the last year, crashing along with the price of bitcoin, … [+]
“We gave support before, but we won’t pretend to make love after divorce,” CZ said. “We are not against anyone. But we won’t support people who lobby against other industry players behind their backs.”
The drama has caused consternation among the crypto community who fear the industy will be hard hit by another terra luna or Celsius-style meltdown.
“[It] feels like people want FTX to be insolvent and are trying to cause a bank run,” Gabriel Shapiro, the general counsel at blockchain researcher Delphi Labs, posted to Twitter. “[It] would be another major political [and] regulatory black eye for the industry—can we not?”