FTX/Alameda Binance drama
The crypto community and markets were shaken by the announcement made by Binance's CEO Changpeng Zhao known as CZ on his Twitter account saying that Binance plans on and are actively selling its share of the exit equity it got from FTX last year.
For reference, FTT is the coin issued by FTX the second biggest crypto exchange it can be used to get a fee discount.
CZ said that Binance has over $2.1 Billion worth of FTT and BUSD from the deal equity and will sell the FTT value.
So far we don't know exactly how much this will be but we know that that's at least around $600 million.
What is the Drama about?
Earlier this month the Alameda research fund holdings spreadsheets got leaked and revealed that the venture is highly overvaluing its holdings of which around $6 Billion are in FTT tokens and other FTT collateralized products. The revelations CZ might be referring to might be the leaked spreadsheet and this sent FTT price tumbling, also CZ said that FTX owner Sam Bank Fried has been actively promoting lobbying efforts to harm the competition in the crypto industry which of course is mainly Binance.
So maybe the tweet and this move by CZ were just to destabilize FTX and is just a regular competitor move pulled by Binance against its first competitor but let's dig deeper because what happened next is interesting.
Let's Dig deeper
Alameda Research is the sister company of FTX both companies are owned and founded By Sam Bank Fried. FTX is the crypto exchange and Alameda is doing the trading. Alameda has been one of the most successful trading firms in the past few years, and even in the crypto winter, they have been bailing out falling companies like 3 Arrows Capital and BlockFi acquiring their assets and liabilities in hopes of less macro impact on the industry.
But when their supposedly leaked spreadsheets came to light people started questioning their supposedly great success. We saw in the spreadsheet that their FTT valuation was 160% of the FTT market cap at that time showing that this asset is highly illiquid and it represents most of their asset portfolio on which they rely as collateral for their loans and other liabilities which are currently standing at a staggering $8 Billion.
Caroline Ellison which is the current CEO of Alameda said that the balance sheet leaked wasn't a complete reflection of their real asset and also insured people that most of their loans has been already paid off.
She also directly replied to CZ on Twitter saying Alameda is ready to purchase all the FTT Binance wants to sell at $22 a piece at that time FTT was crashing and was trading at around $21.1, this tweet pumped the price back up.
It's not the end of the story
The Alameda research CEO recognized by the tweet that the balance sheet leak was somewhat real and that they own 160% of the total FTT circulating supply and that they overvalued their balance sheets and even if they have more assets that are still a huge red flag. Also, does this mean they could have more liabilities on those accounts not reflected in the leaked balance sheets, Alameda didn't release any official document or transactions to prove their claims, and this usually isn't a good sign at all.
We at cryptomasterlebanon.com are working actively researching this matter because we could be on a massive opportunity Terra Luna collapse level and we will be following up with a new article very soon on the matter. Stay tuned and focused because things can happen really quickly follow us on social media and turn on the notification button to stay updated on this urgent matter.
TikTok: https://www.tiktok.com/@crypto_master_lb
Twitter: https://twitter.com/NftLebanon
Instagram: https://instagram.com/crypto_master_lb
YouTube: https://youtube.com/channel/UCc2FZUmjaCmz4fP69W8p-cw