Despite all the stinging memes flooding Crypto Twitter when Binance announced that it would buy FTX and then not buy it, it stayed with a bag: 5% of the total supply of FTT, which is now only worth $65 million.
FTT is the built-in tool of the FTX exchange, which provides its owners with discounts on trading fees. It works like a customer loyalty program. The more a user owns, the more discount he gets on FTX trades. Or at least that’s how it worked.
A person familiar with Binance’s due diligence said about the FTX deal Decrypt That the exchange was able to sell very little of its FTT before announcing its withdrawal from the FTX deal. FTT that used to be valuable 580 million dollars on SaturdayWhen Binance initially fired the alerts by moving them, it will be worth it now $89 million.
FTX problems started last week after Code office It reported that at least $5 billion of Alameda Research’s $14 billion balance sheet was FTT. Both FTX and Alameda were founded and owned by FTX CEO Sam Bankman-Fried, but he has always maintained that the two entities are separate.
This news prompted Binance to begin liquidating its FTT position, which was subsequently followed by a group of retail investors and traders who attempted to do the same. The pullback drove down the price of FTT and led to a liquidity crunch for FTX that it was eventually unable to recover from.
Binance ended up with a large FTT position because it was used by FTX and the coins settled to buy Binance’s equity stake last year. A source familiar with the deal said that Binance decided to exit its equity position after numerous controversies and strong concerns about its rival’s relationship with Alameda Research.
At the moment, the wallet whose FTX tokens were transferred from Binance still holds 17 million FTTs, with an approximate value. 65 million dollars At the time of writing, according to Etherscan. The Binance hub represents 5% of the total FTT supply.
In the past week, the price of FTT fell by 85%, from $24.39 to $3.80, according to Queen Gekko.
The token, which has a daily volume of between $50 million and $100 million, rose to $1.6 billion in volume the next day after Binance CEO Changpeng Zhao confirmed that the exchange was selling FTT. It surged again, to $4.4 billion in volume on Wednesday, when Binance announced the deal was halted.
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