FTX and Binance saga might result in some serious problems in the already challenged cryptocurrency market.
The drama surrounding FTX and its underlying token FTT seems to be gaining more momentum in the crypto sector as the trading activity of one of the largest exchanges in the world seem quite suspicious more than it was several days ago.
It Started With Binance
Some days ago, Binance CEO Changpeng Zhao said that they had gotten $2.1 billion in BUSD and FTT tokens after they became one of the early investors in FTX. He said that they plan to sell these digital holdings due to SBF’s unethical actions. Notably, they plan to distribute $600 million worth of assets on the open market in the coming 1-2 months.
0x4c8C (Alameda)
transfer a large amount of stablecoins to 0xf233 and then transfer a large amount of stablecoins from gate, huobi, okx, kucoin to the addresses and send them to 0x2faf (FTX hot wallet) to deal with withdrawals. Picture by @maid_crypto and @lianyanshe pic.twitter.com/PKqCSpUpkh— Wu Blockchain (@WuBlockchain) November 7, 2022
Alameda Research lead Caroline Elison has publicly messaged Changpeng Zhao and told him to sell all of their FTT holdings for $22 to negate the negative effect on the asset’s price. That is where the story started.
Huge Outflows And Self-Bailout
In the past 24 hours, a huge amount of stablecoins from wallets on OKEx, Huobi, Kucoin, and other exchanges has been sent to the exchange. The most probable reason is to deal with the huge withdrawals that have come up after Binance declared that it plans to sell its FTT holdings.
Buy Crypto NowFundamentally, the major run from the FTX exchange seems beneficial for Binance since it remains one of the largest and most popular exchanges in the sector. Nearly half a billion dollars has so far flowed off the exchange. Since investors and traders have to use some platform to operate on the market, Binance might become their ideal choice.
At the time of writing, FTX faced no issues with liquidity or current debt, which means that Binance’s selling activity should never harm normal investors.
