Bitter exchange sees $584 million worth of FTX’s native token FTT liquidated after spat between CEOs


  • Binance CEO  orders liquidation of $584 million FTT in retaliation for FTX CEO’s comments. 
  • Samuel Bankman-Fried, the CEO of FTX exchange stoked the ire of Binance’s chief with controversial regulatory proposals regarding DeFi.
  • FTT price declined 13% week on week and the token is in a steady downtrend.

Binance CEO Changpeng Zhao (CZ) and FTX’s Samuel Bankman-Fried have locked horns over how cryptocurrencies should be regulated. The war of words entered the financial realm after CZ announced the mass liquidation of Binance’s holdings of FTX’s native token FTT. 

Also read: Will re-listing on crypto exchanges trigger a bullish breakout in XRP price?

Binance liquidates FTT holdings, native token price declines

Binance, the world’s largest exchange by trade volume, liquidated $584 million in FTX exchange’s native token FTT in retaliation over comments made by Samuel Bankman-Fried, FTX exchange CEO about how the crypto and DeFi industry should bem regulated.

In October 2022, Sam Bankman-Fried directed regulators towards decentralized finance products and platforms but the crypto community criticized the CEO of FTX for his blueprint for regulatory oversight and industry standards addressing DeFi. He proposed that DeFi front-end providers, website hosts and even related marketers be required to register as traditional financial brokerages.

The implication of such a classification would subject DeFi users to Know Your Customer procedures and require enormous capital expenditure and resources. Opponents argue that since decentralized finance is currently self-regulated, any intervention from authorities could be considered redundant at best. Further, they say that ironically, it is centralized platforms and their opaque operations that require regulation the most.

CZ told his followers on Twitter that Binance is liquidating its holdings and it is a “post-exit risk management” move. CZ argues that after learning from the Terra collapse, Binance won’t support people who lobby against other industry players. Therefore, $584 million in FTT was liquidated by the exchange. 

Binance, which previously owned a stake in FTX, exited from its position in 2021, receiving roughly $2.1 billion equivalent in a cash payout (BUSD and FTT). Due to the recent developments, the exchange decided to liquidate the FTT remaining on its books.

CZ announced that Binance wants to liquidate in a way that minimizes the market impact. Due to market conditions and limited liquidity, this will take a few months to complete. Binance always encourages collaboration between industry players and accordingly views FTX CEO’s move as potentially hurting the industry in the long term. As a result, Binance wants to wash its hands off the exchange’s native token.

FTT price in free fall

The debate between crypto influencers and the war waged by SBF against DeFi has adversely affected FTT price. The native token’s price plummeted 13% in the past week. The top 50 holders of FTT hold a total of 322.72 million tokens, accounting for $7.44 million, 98.12% of the total supply. FTT is highly concentrated in a small number of addresses. 

FTT concentration in small number of addresses

FTT concentration in small number of addresses

Analysts at Lookonchain believe FTT’s high concentration in whale wallets could result in a massive crash in the token’s price once large wallet investors exit. Analysts have set a target of $9 for FTX exchange’s native token. 

FTTUSD price chart

FTTUSD price chart

CapoOfCrypto, analyst and trader believes FTT price could decline to the $9 level. Since reserves of FTT across exchanges have a direct impact on price, the token is likely to crumble under selling pressure from key players like Binance and FTT whales. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP