Investors Withdraw Millions From FTX As Binance Begins Liquidating FTT Token

Hot on the heels of Binance CEO Changpeng 'CZ' Zhao declaring that Binance is liquidating its stash of FTX's native exchange token FTT, mass withdrawals from FTX have accelerated, with weekly stablecoin outflows from FTX reaching a whopping $451 million, according to Nansen data. Conversely, Binance has seen net inflows of more than $411 million over the same period. Decrypt reports: This mass exiting of tokens from the FTX exchange comes amid reports that Alameda Research, the trading firm founded by Sam Bankman-Fried, held as much as $5.8 billion in the exchange's native FTT token -- $3.66 billion in 'unlocked FTT' and $2.16 billion in 'FTT collateral.' Given such large exposure to FTT, some have speculated that this could mean a liquidity crisis for Alameda should the markets move against FTT, dropping the token's value.

Shortly after these reports hit the market, CZ took to Twitter to announce that he would be offloading the firm's FTT holdings. Binance received funds in FTT as part of its exit last year from an early equity position in FTX it had since 2019. 'Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books,' CZ tweeted on Sunday. CZ said that he 'won't support people who lobby against other industry players behind their backs.'

The FTX boss also cited Alameda Research CEO Caroline Ellison, who said, 'that specific balance sheet is for a subset of our corporate entities.' Ellison also claimed that the firm has over $10 billion of assets 'that aren't reflected there.' SBF went on to thank 'those who stay level-headed during crazy times,' adding that withdrawals and deposits at FTX were working fine and the exchange had already processed 'billions of dollars' worth of transactions. As for Binance's decision to dump its FTT holdings, Ellison offered to buy the exchange's remaining FTT holdings over-the-counter (OTC) for $22 if CZ was looking to 'minimize the market impact' of the sudden move. UPDATE 11/7/22, UTC 04:33: 'Fears over another 'Three Arrows' event, but this time tied to FTX and its hybrid investment fund/market maker Alameda Research, gripped the markets Tuesday morning Asia time, sending FTX's exchange token FTT down nearly 20%,' reports CoinDesk in an updated article. 'Data from CoinGlass shows that there continues to be building short interest in FTT as open interest has surged 8% during the last hour to a total of $215 million.'

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