FTX and Binance drama may cause some serious issues on already problematic crypto market
The drama surrounding FTX and its underlying token FTT is gaining more momentum in the cryptocurrency community as trading activity at one of the world’s largest exchanges looks to be even higher. suspicious than a few days ago.
It begins with Binance
A few days ago, the Binance CEO Changpeng Zhao stated that they have received $2.1 billion in BUSD and FTT token after becoming one of the early investors in FTX, and their plan is to sell those digital holdings due to SBF’s unethical actions. Their plan was to distribute $600 million worth of assets on the open market in the next 1-2 months.
Alameda Research Lead Carolyn Ellison publicly messaged CZ asking it to sell all of its FTT holdings for $22 to negate the negative impact on the asset’s price. This is where the story begins.
Massive outflows and self bailout
In the last 24 hours, a large amount of stablecoins from wallets on Huobi, Okx, Kucoin and other exchanges has been moved toward the exchange. The most likely reason is to deal with massive withdrawals that have been caused after Binance declared that it will sell its FTT holdings.
Technically, the massive run from the FTX exchange is beneficial to Binance as it is one of the largest and most popular exchanges in the industry. Almost half a billion dollars has already been taken off the exchange. Since traders and investors have to use some sort of platform to operate on the market, Binance will most likely be their choice.
At press time, FTX faced no issues with liquidity or existing debt, meaning that Binance’s selling activity should not harm regular investors.
