Changpeng Zhao Declares War Against Alameda With Mass FTT Sale

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  • Binance CEO Changpeng Zhao announced over the weekend that Binance is selling hundreds of millions of dollars in FTT tokens
  • The decision was made after “revelations” about FTT’s role in the backing of the $14.6 billion firm
  • Alameda has denied that it is backed by FTT tokens to a worrying degree

Binance founder and CEO Changpeng Zhao took aim at Alameda Research this weekend when he announced that the exchange would sell its entire FTT holding following allegations that much of the value of its value is bound up in FTX’s FTT token. Zhao posted on Twitter over the weekend that “recent revelations” over the true valuation of Alameda had convinced him to liquidate hundreds of millions, if not billions, of dollars in FTT tokens. These revelations were posted by Coindesk last week but were denied by Alameda over the weekend, which said that Coindesk’s figures didn’t take all its capital into account.

Alameda Accused of Building on Sand

Coindesk claimed last week that Alameda Research, the trading firm owned by FTX founder and CEO Sam Bankman-Fried, is heavily backed by FTX’s FTT token, calling the ties between FTX and Alameda “unusually close”. Of course, the major danger associated with this is that cryptocurrencies are notoriously volatile, making Alameda’s standing less than firm, with its value around the $14.6 billion mark.

Another aspect to the concerns over Alameda are that it has huge FTT-collateralized loans which could be margin called if FTT price reaches a certain value, which would not only crash the FTT token price but could cause a mini collapse. However, Alameda CEO Caroline Ellison sought to clarify the firm’s position over the weekend:

This didn’t appease Zhao however, who tweeted just over an hour later than Binance had begun liquidating its FTT position:

Questions Still Need Answering

The shenanigans obviously had an impact on the FTT token price, which saw some crazy price action around the time of the tweets:


Despite Alameda fighting back against Coindesk’s claims, there are still some important questions that the cryptocurrency community wants answered that would put the case to bed:

Whether or not Alameda is prepared to answer these questions might go some way to establishing how seriously it is taking the concerns of the community.