Binance CEO Changpeng “CZ” Zhao said Sunday that his cryptocurrency exchange is liquidating its holdings in FTT, the native token of competitor exchange FTX.
Zhao referred to “recent revelations that have come to light,” but did not publicly address them, nor did he respond to a request for clarification from Decrypt.
The decision follows weeks of criticism of Sam Bankman-Fried, FTX founder and CEO, over regulatory proposals he made in a blog post recommending restrictions on DeFi. He has since committed to revising his regulatory position.
Binance received the funds in FTT as part of its exit last year from an early stock position in FTX it had had since 2019. FTX had bought out Binance’s stake in the company through a $2.1 billion mix of FTT and BUSD – the Binance exchange’s stablecoin – pursuant to a expression by Zhao.
CZ said the liquidation is expected to take a few months due to market conditions and limited liquidity. It will also do so in an attempt to minimize the market impact on the financial transaction tax, he said.
Separately, according to CoinGecko, the FTT is down 9.5% over the past day from $25.55 to $23.03, recovering from a low of around $22 on Sunday.
According to Etherscan, 22,999,999 FTTs, worth $584 million at the time, were transferred from a wallet to the Binance exchange on Saturday. That equates to 17% of circulating FTT supply, according to CoinGecko. CZ Approved The funds moved were part of the exchange’s move to liquidate its position in FTT.
Zhao explained in a Twitter thread on Sunday that the decision to liquidate his position at FTT was not a shot at his competitor. However, a user on Twitter suggested that the sale could have an impact on the loans backed by the token.
Caroline Ellison, chief executive of Bankman-Fried’s crypto trading firm Alameda Research, offered to buy Binance’s remaining FTT at a set price of $22 if Zhao also wanted to “minimize the impact on the market.”
Binance was the leading exchange in terms of FTT volume over the past day. In the past 24 hours, Binance accounted for 6.3% of FTT’s trading volume, or $95.4 million, according to CoinGecko.
Binance was an early investor in FTX and although the initial investment amount was not disclosed, around the time of Binance’s exit, Zhao Forbes had said, “We’ve seen tremendous growth from them, we’re very happy with it, but we’re complete got out.”
On Sunday, CZ said that his company usually holds tokens for the long term, but that Binance has held onto its position in FTT for too long.
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