Sam Bankman-Fried, the head of FTX, responded to Changpeng Zhao, the CEO of Binance, following the company’s announcement regarding the $2.1 billion sale of FTT.
CZ vs. SBF
According to Changpeng Zhao, the CEO, and co-founder of Binance, the company is selling all of its remaining FTX tokens, worth around $580 million, as it announced on Sunday.
SBF said on Twitter that the assets of FTX and the exchange are fine. He also stated that the platform does not invest customer funds and does not suspend withdrawals. The last point is related to some users’ growing concerns about the platform’s withdrawals.
According to Bankman-Fried, the exchange is thoroughly regulated since it passed its GAAP audits, which showed that it has over a billion dollars in excess cash. Bankman-Fried then directly addressed Changpeng Zhao, stating that he would be happy to work with the Binance CEO to create a good crypto ecosystem.
In a statement, Zhao said that the company decided to sell its 23 million FTT tokens due to various developments. He did not provide further details regarding the reasons behind the decision. However, he noted that it was not against a competitor and was instead focused on post-exit risk management, learning from Luna.
The company first announced its exit from the FTX exchange last year. During this time, Zhao disclosed that it received $2.1 billion from the exchange Binance USD (the stablecoins issued by Binance) and FTT tokens. The remaining FTT coins will take a few couples of months to complete.
According to a person close to the company, Binance focused on reducing its platform’s risk after it noticed that certain companies, which are associated with Bankman-Fried, had a negative balance sheet.
Last week, there was a report on Alameda Research, a sister firm of FTX, mainly composed of FTT tokens. However, Caroline Ellison, the company’s CEO, noted that the report did not consider the firm’s assets, which are worth around $10 billion.
After Zhao’s statements, Bankman-Fried, an investor in the cryptocurrency industry, praised the founder of Binance. In 2019, Binance announced its intention to invest in FTX, a crypto derivatives exchange established in Hong Kong. A year later, Zhao noted that the company had decided to exit its equity position in FTX. He said the company’s exit was part of a normal investment cycle.
Selling pressure is on the rise
Several on-chain data providers reported that FTX is rapidly deploying funds following the liquidation of the former exchange.
Ki Young Ju, the CEO of CryptoQuant, noted that the pressure is on for the FTT Token and SBF. According to him, the reserve of FTX has dropped to only $51 million, which is -93% over the last two weeks.
The hourly withdrawals for ETH on FTX have also hit an all-time high, and the token reserve has dropped to only $51 million. That suggests that the selling pressure is on for the token.
Despite the market volatility, Bankman-Fried, the CEO of FTX, tried to reassure the investors by saying that the platform is still operational and processing billions of dollars in deposits and withdrawals. He also noted that the company is hitting its node rate capacity and is converting tons of USD into stablecoin.
He also noted that the company is still grateful to the investors who have stuck with FTX. He said that the company would welcome everyone back once the market returns to normal.
FTT is currently at $22.26, 9% lower than yesterday.