FTX Founder Dismisses Balance Sheet Concerns After Rival Binance Announces Token Liquidation

FTX's Sam Bankman-Fried said in a series of tweets on Monday that a competitor was trying to "go after" the firm with "false rumours".

By Reuters | Updated: 8 November 2022 15:15 IST

FTX Founder Dismisses Balance Sheet Concerns After Rival Binance Announces Token Liquidation

Crypto enthusiasts had raised questions on Twitter last week about FTX's token

Highlights

FTX's token is trading near its lowest since February last year
Three Arrows Capital and Voyager Digital have filed for bankruptcy
Binance will sell its holdings of the FTX token

Sam Bankman-Fried, the billionaire founder of crypto exchange FTX, sought to reassure crypto investors on Monday after a rival exchange, Binance, said it would liquidate its holdings of FTX's native token.

Binance's CEO, Changpeng Zhao, said in a series of tweets on Sunday that his firm would sell its holdings of the FTX token "due to recent revelations that have come to light." Zhao did not specify which revelations he was referring to or how much of the token Binance held.

2) FTX has enough to cover all client holdings.

We don't invest client assets (even in treasuries).

We have been processing all withdrawals, and will continue to be.

Some details on withdrawal speed: https://t.co/tSjhJW3JlI

(banks and nodes can be slow)
— SBF (@SBF_FTX) November 7, 2022

"A competitor is trying to go after us with false rumors," FTX's Bankman-Fried said in a series of tweets on Monday. "FTX is fine. Assets are fine."

Bankman-Fried said in his tweets that FTX keeps "audited financials" and is "highly regulated". He did not initially specify which competitor he was referring to, but tagged Zhao in a later tweet, saying "I'd love it, @cz_binance, if we could work together for the ecosystem."

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

Crypto enthusiasts had raised questions on Twitter last week about FTX's token, following a report from crypto news website CoinDesk about a leaked balance sheet from Alameda Research, a crypto trading firm founded by Bankman-Fried that maintains close ties with FTX.

According to CoinDesk's report, much of Alameda's $14.6 billion (roughly Rs. 1,19,300 crore) in assets are held in FTX's token, which is called FTT. Reuters was unable to independently verify the accuracy of the report or the origin of the leaked balance sheet.

Since the CoinDesk report on November 2, FTX's token has shed around $400 million (roughly Rs. 3,200 crore) from its market cap as traders sold the token. It is trading near its lowest since February last year, according to CoinGecko data.

Silk Road Debacle: Over 50,000 BTC Worth Over $1 Billion Recovered in US

Alameda CEO Caroline Ellison also said in a tweet that the "balance sheet info which has been circulating recently" only showed a subset of Alameda's corporate entities. The firm has more than $10 billion in assets that are not reflected in the CoinDesk report, she said.

Crypto investors have been on edge following a rocky summer, which saw token prices plunge as rising interest rates and a broader financial market downturn prompted investors to ditch riskier assets.

Mainstays in the industry like Singapore-based crypto hedge fund Three Arrows Capital and crypto lenders Celsius Network and Voyager Digital have filed for bankruptcy. FTX won a bid in September to buy the assets of Voyager, and Bankman-Fried has said his exchange is working to return money to Voyager customers.

Are the Pixel 7 and 7 Pro the best in their segment? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.