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The BitDAO community can finally breathe a sigh of relief.
Alameda Research, the trading firm founded by crypto billionaire and FTX CEO Sam Bankman-Fried, has fulfilled BitDAO’s request for proof of funds after the price of the DAO's native BIT token suddenly dropped 20% in the early hours of Tuesday.
Alameda purchased 100 million BIT tokens in November last year by swapping 3.36 million FTT tokens.
According to BitDAO, which holds its corresponding FTT tokens in the DAO’s treasury, the agreement also included a public commitment not to sell each other’s tokens until November 2024. The price of BIT plunged from about $0.41 to $0.30 early on Tuesday, raising concerns that Alameda may have breached this agreement, prompting BitDAO to ask the trading firm for proof that it was still holding the 100 million BIT tokens.
Concerns continued to mount after, according to BitDAO's partner relations lead Igneus Terrenus, FTX's hot wallet showed fewer than 100 million BIT tokens.
"If this request is not fulfilled, and if sufficient alternative proof or response is not provided, it will be up to the BitDAO community to decide (vote, or any other emergency action) how to deal with the $FTT in the BitDAO Treasury," read the BitDAO forum discussion.
Now, according to data provided by Etherscan, Alameda executed five transactions on Tuesday, with the largest of them worth 92,000,000 BIT ($36.3 million) coming from the FTX exchange.
Two more transactions worth 499,996 BIT ($198,621) each came from, followed by two smaller withdrawals worth 6,500,100 and 500,000 BIT, correspondingly, sent from unidentified wallets.
Now that the transfer has been updated, Terrenus told Decrypt that there would be no sale of FTT as suggested in BitDAO's proposal.
— BitDAO (@BitDAO_Official) November 8, 2022
BitDAO was founded in June 2021 by Bybit, a China-born derivatives exchange now headquartered in Singapore. On its launch, it raised $230 million in a round led by Peter Thiel, the Thiel-founded Founders Fund, Pantera Capital, and Dragonfly Capital.
'Thanks for the swift action': ByBit co-founder
Responding to ByBit co-founder Ben Zhou's initial claims that FTX had sold its BIT holdings, Zhou, Alameda CEO Caroline Ellison said she was “busy," but assured that the trading firm would provide BitDAO with proof of funds “when things calm down.”
Zhou, in turn, said Alameda’s response gave BitDAO “a lot of confidence.”
“For others that are jumping into the conclusion, nothing is confirmed until proven, I am sure Alameda will be able to navigate the current straits,” added ByBit CEO.
Once the funds had been allocated, Zhou thanked Ellison and Alameda for their "swift action."
The BIT token rebounded shortly afterward and is trading at around $0.38, down 4.2% over the past day, per CoinGecko.
The FTX exits were, in turn, partly caused by speculations of Alameda’s insolvency, a situation Sam Bankman-Fried described on Monday as a competitor “trying to go after us with false rumors.”