FTX Dismisses Balance Sheet Concerns As Binance Plans Token Sale
Sam Bankman-Fried, the billionaire founder of crypto exchange FTX, tried to reassure crypto investors on Monday after rival exchange, Binance, said it would end its holding of the traditional FTX token.
Binance CEO Changpeng Zhao said in a series of tweets on Sunday that his company would be selling the FTX token “due to recent revelations that have come to light.” Zhao did not specify which revelations he was referring to or how much of the token Binance had.
2) FTX has enough to cover all customer fees.
We do not invest in client assets (even in real estate).
We have been processing all withdrawals, and will continue to do so.
More information on withdrawal speed: https://t.co/tSjhJW3JlI
(banks and nodes can be slow)
— SBF (@SBF_FTX) November 7, 2022
“A competitor is trying to go after us with false rumors,” FTX’s Bankman-Fried said in a series of tweets on Monday. “FTX is going well. Assets are good.”
Bankman-Fried said in his tweets that FTX maintains “researched funds” and is “highly regulated”. He didn’t initially specify which competitor he was talking about, but he tagged Zhao in a recent tweet, saying “I’d love it, @cz_binance, if we could work together on an ecosystem.”
Crypto enthusiasts raised questions on Twitter last week about the FTX token, following a report from crypto news website CoinDesk about the leaked balance sheet of Alameda Research, a crypto trading firm founded by Bankman-Fried that maintains close ties to -FTX.
According to a CoinDesk report, most of Alameda’s $14.6 billion (roughly Rs. 1,19,300 crore) in assets are held in the FTX token, called FTT. Reuters could not independently verify the accuracy of the report or the origin of the leaked balance sheet.
Since CoinDesk’s report on November 2, the FTX token has shed nearly $400 million (roughly Rs. 3,200 crore) from its market cap as traders sell off the token. It is trading near its lowest since February last year, according to CoinGecko data.
Alameda CEO Caroline Ellison also said in a tweet that “recently released balance sheet information” reflects a small portion of Alameda’s companies. The company has more than $10 billion in assets that do not show up in CoinDesk’s report, he said.
Crypto investors have been on the edge of summer following a rocky summer, when prices fell as interest rates rose and a broader decline in financial markets prompted investors to dump riskier assets.
Industry giants such as Singapore-based crypto hedge fund Three Arrows Capital and crypto lenders Celsius Network and Voyager Digital have filed for bankruptcy. FTX won a bid in September to buy Voyager’s assets, and Bankman-Fried said her exchange is working to return money to Voyager customers.
© Thomson Reuters 2022