Binance CEO Changpeng “CZ” Zhao said on Sunday that his cryptocurrency exchange is liquidating its holdings of FTT, the native token of rival exchange FTX.
Zhao referenced "recent revelations that have came to light," but did not elaborate publicly nor respond to a request for clarification from Decrypt.
The decision follows weeks of criticism directed at FTX’s founder and Chief Executive Sam Bankman-Fried for regulatory proposals he put forth in a blog post which recommended restrictions regarding DeFi. He has since committed to revising his regulatory position.
Binance received the funds in FTT as part of its exit last year from an early equity position in FTX it had had since 2019. FTX had bought out Binance’s stake in the company through a $2.1 billion mix of FTT and BUSD–the stablecoin native to Binance’s exchange–according to a statement from Zhao.
CZ said the liquidation is expected to take a few months to complete due to market conditions and limited liquidity. It will also be done in a way that tries to minimize the market impact on FTT, he said.
Regardless, FTT has dipped 9.5% over the past day to $23.03 from $25.55, according to CoinGecko, bouncing off of a low of around $22 on Sunday.
On Saturday, 22,999,999 FTT, worth $584 million at the time, was transferred from a wallet to Binance’s exchange, according to Etherscan. That is the equivalent of 17% of the circulating supply of FTT, according to CoinGecko. CZ confirmed the shifted funds were part of the exchange's move to liquidate its position in FTT.
Zhao stated in a Twitter thread Sunday that the decision to liquidate its position in FTT was not a shot at its competitor. However, one user on Twitter suggested that the selling could have an impact on loans backed in the token.
Caroline Ellison, chief executive of Bankman-Fried’s crypto trading firm Alameda Research, offered to buy Binance’s remaining FTT for a set price of $22 if Zhao was looking to “minimize the market impact” of the move as well.
Binance has been the leading exchange in terms of FTT’s volume in the past day. Over the past 24 hours, Binance accounted for 6.3% of FTT’s trading volume or $95.4 million, according to CoinGecko.
Binance was an early investor in FTX and while the sum of the initial investment has not been disclosed, Zhao had told Forbes around the time of Binances exit, “We’ve seen tremendous growth from them, we're very happy with that, but we’ve exited completely.”
On Sunday, CZ said that his company usually holds tokens for the long term, but that Binance had held on to its position in FTT for too long.
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