SBF calls for collaboration with Binance ‘for the ecosystem’
FTX founder and CEO Sam Bankman-Fried took to Twitter again on Nov. 7 to claim that “a competitor is trying to go after the cryptocurrency exchange with false rumors” while also calling for collaboration with rival exchange Binance.
The comments followed a statement from Binance CEO Changpeng “CZ” Zhao concerning the liquidation of the exchange’s position in FTX Token (FTT) as “post-exit risk management” over the weekend.
1) A competitor is trying to go after us with false rumors.
FTX is fine. Assets are fine.
— SBF (@SBF_FTX) November 7, 2022
FTX “assets are fine,” according to SBF, who also alleged that the exchange has enough funds to cover all clients’ holdings and does not invest client assets, even in treasuries. He also said:
“It’s [FTX] heavily regulated, even when that slows us down. We have GAAP audits, with > $1b excess cash. We have a long history of safeguarding client assets, and that remains true today.”
Binance co-founder and chief customer service officer Yi He clarified that the sell-off of FTT had nothing to do with the alleged “war” between the two exchanges.
3）The point we’d like to stress is that the decision to hold or sell a token depends on one’s own risk appetite and judgement. Our decision to sell FTT is a pure investment-related exit decision, which has nothing to do with “a war” and we have no intention to engage in drama https://t.co/Jl5yQRcouv
— Yi He (@heyibinance) November 7, 2022
Earlier on Nov. 7, FTX’s Twitter account also addressed user complaints surrounding withdrawal delays, assuring users that everything is running smoothly with the matching engine, although node throughput remains limited for Bitcoin (BTC) withdrawals at the time of publication.
On Reddit, some users expressed alarm regardin the developments, likening the situation to Celsius halting withdrawals and misleading its users prior to the platform’s collapse.
In a Nov. 6 tweet, Zhao said the decision to liquidate the assets was made after “recent revelations that have came to light,” in reference to Terra’s Luna Classic (LUNC) crash and its impact on the crypto market. He also commented on the FTX founder’s recent actions. In a tweet, CZ added:
“We won’t support people who lobby against other industry players behind their backs.”
On-chain analysis shows that an unknown wallet transferred approximately 23 million FTT to Binance — worth around $584 million — on Nov. 7. According to Zhao, the transfer was part of the exchange’s decision to offload tokens.
Related: FTX addresses user withdrawal complaints amid major token movement
The series of tweets triggered a sell-off of FTX Token that broke below the pattern’s support line near $22.50, accompanied by a volume spike. The sell-off continued on Nov. 7 below the support line, raising risks of a bearish continuation in the coming months, as reported by Cointelegraph.
Binance’s decision was influenced by allegations that the FTX-founded crypto hedge fund Alameda Research could go insolvent due to its exposure to illiquid altcoins, including FTT. As of June 30, Alameda Research reported a balance sheet of $14.66 billion, with FTT the largest holding company with $5.8 billion, making up 88% of its net equity.