The War Between Binance and FTX Intensifies

Prepare for battle. The war between his two biggest bosses in the crypto space, Binance CEO Changpeng Zhao and FTX CEO Sam Bankman-Fried (SBF), seems to be gaining momentum and is currently the most popular in the market. It’s a hot issue.

The drama began early Sunday morning when FTX’s FTT token suddenly dropped. Rumors have surfaced that the 23M FTT giant whale, possibly Binance, may be dumping its tokens. Shortly thereafter, the price of FTT he began to fall by 10%.

Concerns that a recession could trigger FTX liquidation, leading to a Terra Luna-style “death spiral” spread like wildfire on Twitter. Some users have accused SBF of using his FTT tokens to run a fraudulent scheme.

For those who are wondering #FTX & #FTTthe TLDR is:

1️⃣ FTX prints FTT from scratch
2️⃣ FTX lends FTT to Alameda Research
3️⃣ Alameda Research Borrows USD Stable Stocks to FTT
4️⃣ Alameda Research Submits USD Stables to FTX
5️⃣ Repetition = Infinite Money

🚨 No need to sell FTT! pic.twitter.com/RJiEpbcgrf

— Duo Nine | discord.gg/ycc (@DU09BTC) November 6, 2022

Binance Vs. FTX: Time for War

The sudden price drop was preceded by a report on Dec. 2 that revealed FTX’s internal financial documents, showing overlap between Bankman-Fried’s cryptocurrency exchange FTX and his hedge fund, Alameda Research. rice field.

According to reports, Alameda’s balance sheet is in a precarious position as it is largely backed by FTT tokens. His total FTT offering totaled just $3.32 billion that day, compared to his $5.82 billion for his FTT recorded on Alameda’s balance sheet as of June 30. .

Alameda CEO Caroline Ellison denied the allegations, pointing to incomplete data, but uncertainty remained in the market.

CZ hit hard yesterday (Sunday) when the Binance CEO announced his decision to liquidate all remaining FTTs on the books as a result of these recent revelations.

according to Estimate According to CryptoQuant CEO Ki Young Ju, Binance owns at least 24 million FTT, worth $547 million, which is a very significant amount for the market.

CZ stressed that its actions were not “directed at a competitor.”

We strive to do so in a manner that minimizes market impact. Due to market conditions and limited liquidity, we expect this to take several months to complete.

Alameda CEO Caroline Ellison responded a little later, saying that her company would be happy to buy the token for $22 and stop the FTT from freefalling for the time being.

@cz_binance If you want minimal market impact on your FTT sales, Alameda is happy to buy it for $22 today!

— Caroline (@carolinecapital) November 6, 2022

CZ stressed that its decision to sell all FTT was not directed at its ore competitor SBF, but the action reflects something else. So it seems very strange to announce mass sales before the actual sale. By doing this, all other market participants will sell before you. So the question arises, what is the purpose of CZ? Certainly not the smallest profit possible.

Additionally, CZ followed up late last night with a tweet reinforcing community rumors and fears that FTX is a Terra Luna-like Ponzi scheme. Binance CEO wrote:

Liquidating our FTT is just a post-exit risk management lesson learned from LUNA. We used to support each other, but after the divorce, we don’t pretend to love each other. We are not against anyone. However, we do not support those who lobby other industry players behind the scenes. to the next.

Analyst Dylan LeClair warned “There is a massive speculative attack going on.” “This excess leverage can also be used for short selling.” About $100 million in small spot markets, illiquid floats, and more spot sales (CZ).”

And CZ is coming soon and has already started its first liquidations. Binance has confirmed that a transaction from his unknown wallet of 30 million FTT tokens worth approximately $584.8 million to Binance was “part” of the liquidation of FTT tokens by Binance.

Yes this is part of it. https://t.co/TnMSqRTutr

— CZ🔶 Binance (@cz_binance) November 6, 2022

Several on-chain data providers have indicated that FTX appears to be urgently pumping money in response to Binance’s liquidation of FTT.

According to CryptoQuant CEO Ki Young Ju, the pressure on SBF and FTT tokens is increasing. FTX stablecoin reserves just hit a one-year low. account “Only $51 million so far, -93% in the last two weeks.”

Additionally, FTX hourly withdrawals of ETH hit all-time highs, as did FTT token reserves across all exchanges. 60% of the current circulating supply is on exchanges, indicating that selling pressure on FTT is building.

Meanwhile, FTX CEO Bankman-Fried tried to calm the market, murmured:

Today, we are already processing billions of dollars in deposits and withdrawals. we continue. (We’re doing anti-spam checks to do more processing. If so, sorry. We’ve reached node rate capacity. We’ll continue.) Also, a large amount of USD <> stablecoin conversions in progress.

Ultimately, you have to do what you want and trade where you want. Thank you to everyone who stayed with us. If this blows you, welcome everyone else.

FTT prices briefly dipped below $22 over the past few hours, but have recovered slightly at the time of writing.